MANILA, Philippines — Manila Electric Co (Meralco) saw its earnings jump in nine months as the country’s slow economic reopening boosts power demand, although the company may face headwinds in the final quarter of the year amid rallying oil prices.
The country’s largest power distributor netted P18.1 billion in the January-September period, up 15% year-on-year on the back of “easing quarantine restrictions” and “increased contribution” from its various business segments.
Energy distributed by Meralco in the nine-month period grew 6% from a year ago, figures showed, pushing up consolidated revenues by 11% year-on-year to P231.7 billion.
While the latest financial results were “encouraging”, tycoon Manuel V. Pangilinan, company chairman, said motoring oil prices are threatening to weigh on Meralco’s earnings in the remaining three months of the year.
“The sudden but significant rise in fuel prices across the board– gas, coal and oil – which can impact generation margins, as well as the lingering effect of the pandemic remain key risks to our outlook for the fourth quarter,” Pangilinan said in a press conference on Monday.
In the first nine months, Meralco’s consolidated energy sales volumes rose 6% on-year to 34,398 GWh. Residential sales volumes, which accounted for 37% of the company’s sales mix, grew 2% on an annual basis to 12,746 GWh despite cooler temperatures that typically temper power demand of households.
Commercial sales volumes — which had a 33% share to total energy sales — also inched up 2% on-year to 11,281 GWh, as easing curbs stimulate demand from businesses like restaurants and malls, Meralco said.
Industrial sales registered the highest year-on-year increase at 16% to 10,263 GWh, mainly boosted by strong demand from semiconductor factories trying to meet orders for microchips, electronic parts and devices. This segment contributed the remaining 30% in Meralco’s sales mix.
Operating expenses, meanwhile, rose 12% year-on-year due to maintenance work. As of end-September, Meralco spent P18.5 billion on capital expenditures.
On Monday, shares in Meralco went down 0.41% to finish at P293.4 apiece.