THE COUNTRY’s biggest electricity distributor on Friday reported third-quarter earnings performance better than in the first and second quarters, with September alone recording the highest single-month growth rate in residential sales volume since January.

The Manila Electric Co. (Meralco) grew core net income – which excludes foreign exchange gains or losses, market-to-market adjustments, gains on disposal of investments and other one-time, exceptional gains – by 15% year-on-year to P4.58 billion last quarter.

Including exceptional items, reported net income for the quarter rose 11% annually to P4.91 billion, with revenues in those three months similary growing by 11% to P66.36 billion, company officials said during Meralco’s quarterly briefing.

“We had a quite favorable operating and financial results,” Meralco President and Chief Executive Officer Oscar S. Reyes said.

Core net income was flat in the first quarter and dropped five percent the following three months, while net income rose by six percent and fell by a 10th in the same respective periods.

Meralco’s latest results fueled a 1.61% increase of its stock price to a P290 finish on Friday, helping the bourse to recover later in the day.

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.

For the nine months to September, core net income grew three percent to P15.4 billion while reported net income increased by two percent to P15.9 billion.

Consolidated revenues reached P214.39 billion, a 10th more than the previous year’s P195.16 billion.

“Electric[ity] revenues amounted to P208.8 billion, higher by 10% over the comparative period in 2016 due to higher generation charge resulting from the combined effects of increased price of coal, oil and gas and the depreciation of the pesos versus the US dollars,” said Betty C. Siy-Yap, senior vice-president and chief finance officer.

Non-electricity revenues dropped by eight percent to P5.5 billion from the level in the previous year, although this segment accounted for only about three percent of overall revenues, she added.

In terms of energy sales, growth for the nine months was at four percent to 31,401 gigawatt-hours (GWh).

“Our customer base continues to increase at a healthy pace. For the first nine months that growth was 4.6%, bringing our total number of customer accounts to 6,250,000,” Mr. Reyes said.

Mr. Reyes said that Meralco Chairman Manuel V. Pangilinan, who was not present during the briefing, wanted to convey that the utility’s profit guidance for the year would only be slightly better than the previous year.

“Last year, we did P19.4-19.5 billion. The guidance for now is there’d be some slight improvement over that,” he said. “We are unable to pin that exact number. It will not be far from that.”

“The reason for that is, number one, some ‘business verticals’ such as retail electricity supply have been increasingly very, very competitive,” he said.

“Secondly, we’re in business development mode, particularly in power generation, so that is reflecting in our results because development expenses are charged as expenses during the year incurred.”

Meralco had said in its yearend 2016 report that it viewed “2017 with cautious optimism in light of potential global sociopolitical developments that may impact trade and investment, and result in financial uncertainty and volatility”.

It has not given any earnings guidance since then.

In a statement distributed during the briefing, Mr. Pangilinan said: “Our goal is to continue building and maintaining a highly reliable, smart and resilient electricity network, a digitally enabled customer experience platform, smart payment fulfillment service, value-adding beyond-the-meter services, internationally competitive electro-mechanical engineering capabilities and services and our portfolio of advanced technology, fuel-efficient and reliable power plants to elevate us to newer growth trajectories.”

Meralco said the nine months to September saw an acceleration in the increase of energy prices, brought about by higher fuel and oil prices.

“The increase was exacerbated by the lingering effects of several weather disturbances that hit the franchise area. Further, the delay in the roll-out of the country’s infrastructure program has added to the slower overall expansion of the business,” it said in a statement attached to a disclosure.

“That said, the overall macroeconomic situation combined with the high base in 2016 have tempered the average growth in energy volume to four percent. Sales volume growth, though muted, was noted across all customer classes.” – V. V. Saulon

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