MANILA Electric Co. (Meralco) on Monday reported a 10% increase in its first-quarter consolidated core net income to P5.62 billion, driven largely by higher electricity sales and contribution from its power generation business.

Reported net income, which includes one-off items, improved by 28% to P5.56 billion after adjustments made relating to the Corporate Recovery and Tax Incentives for Enterprises Act.

Gross revenues during the three-month period rose by 33% to P85.91 billion, with distribution revenues rising by 6% to P15.27 billion.

“What accounts for the movement in volume would be quarantine restrictions, which continue to ease, [and an] increase in economic activities, with commercial volume increasing 6%, and this is coming from real estate, education sector, and full operations of retail and restaurants,” said Meralco Chief Finance Officer Betty C. Siy-Yap in a virtual briefing.

The hike in global fuel prices also caused surging pass-through charges, bolstering Meralco’s electricity revenues by 33% to P83.27 billion from P62.48 billion.

Separately, Meralco Chairman Manuel V. Pangilinan said in a statement that the company is closely working with government units, regulators, and its suppliers to mitigate the “adverse impact” of geopolitical developments towards the Philippine economy.

“The challenges notwithstanding, we remain positive that we shall be able to sustain Meralco’s operational and financial performance in the course of the year, as we bank on the further reopening of the economy, and traverse the road towards post-pandemic recovery,” he said.

During the quarter, the electricity distributor saw a 10% rise in core earnings per share to P4.99.

Meanwhile, average retail rate inched higher by 14% to P8.88 per kilowatt-hour (kWh), driven by 21% and 9% higher generation and transmission charges respectively.

The rate hike was offset by the P0.1064 per kWh average refund of distribution over-recoveries under the order of the Energy Regulatory Commission.

Residential sales accounted for 35% of the overall sales mix, with commercial and industrial sales taking a 34% and 31% share, respectively.

During the period, Meralco spent 70% of its P6-billion capital expenditure allotment on new network connections, asset renewals, load growth projects, support for the government’s Build, Build, Build program, and Meralco’s electrification program.

In anticipation of the increased power demand during the election period, Meralco has also conducted inspections and maintenance activities across its distribution network.

Meralco President and Chief Executive Officer Ray C. Espinosa said that the risks to the company’s electricity rates remain to be the significant rise in fuel prices, as well as the persisting supply restrictions from the Malampaya natural gas field.

“As we fulfill the growing requirements of our customers and further improve overall customer experience, we also remain cognizant of the bigger role we play in supporting the continuing economic recovery and nation-building efforts that will help us emerge as a stronger and more resilient country post-pandemic,” he said.

Meralco shares advanced by P2.40 or 0.71% to close at 342.40 each on Monday.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls.— R.C.S. Agustin