Meralco income more than doubles to P2 billion in 1st quarter

MANILA, Philippines - Power retailing giant Manila Electric Co. (Meralco) said its net income more than doubled to P2 billion in the first quarter this year, mainly due to higher electricity sales and customer count as well as the adjustment in distribution rates.

In a financial report filed at the Philippine Stock Exchange, Meralco said consolidated core net earnings jumped 135 percent to P2 billion while revenues, in which electricity sales accounts for 98 percent of the total, expanded 34 percent to P61.1 billion. 

Volume of energy sold for the period reached 6,996 gigawatt-hours (gwh), up 14 percent from the previous level. 

Total number of billed customers increased to 4.7 million, three percent higher than the year earlier level of 4.6 million.

Total costs and expenses grew 32 percent to P58.1 billion, with cost of purchased power accounting for 89 percent of costs and expenses this year.

 However, consolidated free cash flow reflected a negative level P2.8 billion, as of March 31, 2010.

During the period under review, Meralco spent P1.6 billion, 29 percent higher than the year earlier level of P1.2 billion due to increased system requirements.

Meralco said its financial position, nevertheless, remains strong. As of March 31, 2010, it had cash and cash equivalents of P12.2 billion.

Principal debt repayments on a consolidated basis (inclusive of customer refunds) total P1.1 billion. The company’s debts are mainly denominated in Philippine pesos, and maturities are well spread out, with most of the debt repayments due in 2014.

“We draw optimism from the resilience of the industries as this results in steady growth of our core business. While we continue to focus on system reliability and efficiency, we are also looking at all avenues beyond our franchise area and opportunities beyond distribution to broaden our offerings and hopefully, address customer price points,” said Manuel M. Lopez, chairman and chief executive officer of Meralco.

“Our commitment to upgrade and maintain our facilities for an efficient distribution of power has never been challenged even in a situation where we are forced to do manual load drops. We will continue to coordinate with the generation and transmission sectors of the power industry to manage power distribution to the grid. While we are in control of our energy sourcing strategy and cognizant of demand requirements of our customers,we shall endeavor to provide the most reasonable energy sourcing mix, barring any unforeseen market condition,” added company president and Coo Jose P. de Jesus.