Meralco net income down 52% in Q1

MANILA, Philippines — Manila Electric Co. (Meralco) said its reported net income declined by more than 50 percent due to losses incurred from its Singapore investment.

In an online briefing, Meralco chief finance officer Betty Siy-Yap said the company’s “reported net income contracted by 54 percent to P2.62 billion in the first quarter from P5.67 billion a year ago due to the recognition of the company’s share in impairment of the investment in PacificLight Power Pte Ltd. of P2.7 billion.”

Revenues also declined by seven percent from P75.38 billion to P70.03 billion, wherein 97 percent came from electric revenues.

However, the first quarter core net income rose by two percent to P5.72 billion in the first quarter from P5.59 billion a year ago.

Siy-Yap said the revenue decrease was due to the effect of lower generation and transmission pass-through charges, offset by higher energy sales volumes.

“Generation and other pass-through components as a percentage of total electricity revenues was at 77 percent in 2020, lower than 81 percent in 2019 mainly due to the decrease in WESM (wholesale electricity spot market) prices driven by improved supply condition in the Luzon grid, lower generation charges after the implementation of new Power Supply Agreements (PSAs) starting Dec. 26, 2019 and lower fuel cost throughout the first quarter of 2020,” she said.

In terms of energy sales, Meralco said sales volume rose by 4.8 percent to 10,879 gigawatt-hours (GWh) as customer count went up by four percent to 6.9 million as of end-March.

Meralco first vice president and head of customer retail services and corporate communications Victor Genuino said that 10 percent of the total energy sales during the first quarter was just an estimation due to the enhanced community quarantine.  

However, energy sales was driven by a robust commercial sector and the warmer temperature, with average of 27.07 degrees Celsius this year versus 26.63 degrees Celsius in 2019.

With the lockdown in place, Meralco sees energy sales and revenues to drop in the second quarter.