Corporate News

By Victor V. Saulon,

Meralco Q1 profit up 6% despite slower energy sales

Posted on April 25, 2017

MANILA ELECTRIC Co. (Meralco) reported its first quarter net income jumped 6% to P4.82 billion, despite slower growth in energy sales.

Betty C. Siy-Yap, senior vice-president and chief finance officer, said the quarter’s core profit was flat at P4.6 billion, mostly from contribution of the core distribution business as volume grew 2.6% to 9,317 gigawatt-hours (GWh).

Consolidated revenues during the first three months of 2017 grew 11% to P66.6 billion from P60.2 billion a year ago, she said during Meralco’s media briefing to announce first-quarter financial and operating results.

Ms. Siy-Yap said electric revenues, which account for 97% of total revenues, increased 12% as the growth in volume of energy sold offset the slightly lower average distribution rate of P1.40 per kilowatt-hour (kWh) during the period.

The average retail price during the period was at P7.84 per kWh, of which the generation, transmission, distribution, system loss, and taxes and universal charge components represent 54%, 11%, 18%, 4% and 13%, respectively.

“We are happy with how the quarter ended,” said Meralco President and Chief Executive Officer Oscar S. Reyes in a press briefing at the company’s headquarters.

However, Mr. Reyes noted the 2.6% growth in energy sales was “significantly lower than the growth of 2016 over 2015 of over 12.2%,” which he called an “outlier” and provided a very high base. This year also compares with the 2016 leap year in which the additional day translated to about 100 GWh more in sales.

On a like-for-like year, growth would have been 3.8% rather 2.6%, he said.

Mr. Reyes said customer count also went up 4% to more than 6.1 million during the review period.

Core net earnings per share was at P4.08 for the three months ended March 31, while reported earnings per share was at P4.274.

Meralco Chairman Manuel V. Pangilinan still did not give a profit or revenue guidance for the year.

In a statement, Mr. Pangilinan expressed confidence that Philippine economic growth can be sustained in the short- to medium-term.

“Hence, despite global growth and geo-political uncertainties, we remain confident that the domestic economy will continue to expand at the current pace, or potentially faster, as new drivers weigh in,” Mr. Pangilinan said, citing more government public-private partnership projects.

“Meralco will continue to focus on the resultant growth opportunities for its core electricity distribution business and on sustained operational excellence, mindful of business and technology disruptors emerging in the power industry. In respect of these, we will be engaged in a continuing effort to get businesses and regulators aligned with these developments,” he added.

Luis A. Limlingan, business development head at Regina Capital Development Corp., does not think Meralco’s slowing energy sales is a cause for concern.

He noted Meralco’s sales this year came from a higher base, and that “sales is a combination of volume [multiplied] by price.

“So it is important to see which is lower: price, volume or both. If both can be justified and explained then it shouldn’t be a big cause for concern,” Mr. Limlingan said.

On Monday, shares in Meralco slipped by 0.14% to P280.60 each.