Meralco income down 38.6% to P11.25 billion

MANILA, Philippines — Manila Electric Co. (Meralco) registered a 38.6 percent decline in its reported net income in the nine months of the year to P11.25 billion, but reiterated its forecast of reaching P21 billion in core profit by yearend.

In a virtual press briefing, Meralco chief finance officer Betty Siy-Yap said reported net income for January to September amounted to P11.3 billion from the P18.3 billion in the same period a year ago.

The company said the decline was due to recognition of the company’s share in impairment of the investment in PacificLight Power Pte Ltd. of P2.7 billion in the first quarter of the year.

Similarly, consolidated core net income was 15 percent lower at P15.7 billion from P18.5 billion in the same period last year.

“The full year profitability, core income profit for Meralco, we’ll be expecting about P21 billion, so considering what we did in 2021, this will be a slight decline in profitability of about 10 to 11 percent, in relation to the 2019 core,”Meralco chairman Manuel V. Pangilinan said.

Pangilinan is optimistic of a better financial performance in the fourth quarter of the year compared to the previous quarters.

“As 2020 comes to a close, we remain to be on the lookout for ways to limit the adverse impact of this pandemic, while remaining steadfast in commitment to keeping the lights on. We firmly believe that there is opportunity in every crisis and, are hopeful that we will emerge stronger than ever,” Pangilinan said.

Meanwhile, gross revenues for January to September stood at P214.2 billion, 11 percent lower than the same period in 2019.

Meralco said this was largely due to the seven percent decline in energy sales volumes and the effect of lower generation pass-through charges.

Consolidated energy sales volume in the nine-month period stood at 32,539 GWh, including volumes distributed by Clark Electric of 374 GWh,which was also a 14 percent drop.

“This decline in volumes reflects the net effect of the enhanced community quarantine (ECQ) through general community quarantine (GCQ),” Meralco said.

With the gradual easing under GCQ, Meralco said that industrial and commercial sales volumes showed signs of recovery, although residential sales volumes continue to account for a larger share of total volumes.

Residential volume accounted for 39 percent of sales, while commercial and industrial accounted for 34 percent and 27 percent, respectively.

This can be attributed to the continued work from home and distance learning arrangement.

Meanwhile, Meralco said its year-to-date peak demand in the first nine months of 2020 was less than two percent lower than 2019, with peak demand registered on March 10, 2020 at 7,614 MW, shortly before the ECQ was imposed.

The company reported that the number of customer accounts reached 7.02 million as of the end of September, 92 percent of which are residential customers.

Pangilinan reiterated the company’s commitment to continue to provide the most reliable and resilient network to ensure that the entire franchise is enabled for the economic upturn.

“Today, we estimate that we need to execute close to P50. billion of capital expenditures for our distribution business and generation investments,” Pangilinan said.

“We look at this as an opportunity to create jobs, propel business activities and stimulate consumption,”he said.