By Janina C. Lim, Reporter

LISTED distribution utility Manila Electric Co. (Meralco) said its core net income rose 14% to P5.6 billion in the first quarter, despite a “modest” 2% growth in energy sales volume.

In a statement, Meralco said its reported net profit, which includes one-time gains, went up 7% to P5.7 billion during the January to March period.

The company attributed its first-quarter performance to: “higher distribution revenue underpinned by the 2% growth in energy sales volume; the positive contribution from Clark Electric Distribution Corporation (CEDC), following the settlement in 2018 of an unexpected claim by the Clark Development Corporation over the distribution revenues earned by CEDC from 2014 — 2018; and turnaround operating results of the company’s Retail Electricity Supply units.”

Gross revenues grew 6% to P75.4 billion in the first quarter, from P70.8 billion from a year ago, according to Meralco Senior Vice-President and Chief Finance Officer Betty C. Siy-Yap.

Consolidated electric revenues, representing 98% of total revenues, jumped 7% due to an 8% rise in pass-through charges. Ms. Siy-Yap said the higher pass-through charges resulted from “the combined effects of higher cost of coal and gas, the further weakening of the Philippine peso versus the US dollar and higher prices in the wholesale electricity spot market, which is largely driven by the power supply shortage.”

Energy sales volume went up by 2% to 10,381 gigawatts per hour (GwH), as a result of the “high base effect” of the volume last year and slightly cooler average temperature in the first quarter.

“I think we saw mild growth in sales against a very high base of 2018,” said Meralco President and CEO Oscar S. Reyes. Sales saw an 8.9% growth during the first quarter of 2018.

Of the total sales volume in the first quarter, commercial, industrial and residential accounted for 40%, 31% and 29%, respectively.

The commercial segment went up by 2% to 4,057 GwH, driven by real estate, hotels and restaurants, and storage facilities. The industrial segment grew 5% to 3,068 GwH, boosted by non-metallic, rubber and plastics, and food and beverage sectors.

However, the residential segment hardly grew, “depress[ing] our first-quarter sales,” according to Alfredo S. Panlilio, Meralco senior vice-president, comparing it to the 15% growth recorded in the first quarter of 2018.

For his part, Mr. Reyes said the company was “pleased” with the first-quarter results.

“That our operating results continue to be excellent in terms of all the operating metrics. We outperformed ERC (Energy Regulatory Commission) targets and outperformed also our previous quarters and previous years in terms of power adequacy, reliability, quality, time to connect and energize customers and system loss. We were sort of a little off relative to previous year but still better than ERC (targets),” Mr Reyes said.

Meralco’s customer base stood at 6.7 million as of end-March, up 4.5% year on year. Of this, residential customers accounted for 92%; commercial customers — 7.7%; and industrial customers — 0.2%.

Overall, Meralco appears poised to have a good first half, according to Meralco Chairman Manuel V. Pangilinan.

“I think given, in April [our] growth in volume is six plus percent. So it does look like the first half is going to be a good first half in relation to the first half last year,” Mr. Pangilinan said, but declined to give specific figures.

Meanwhile, Meralco Senior Vice-President and Head of Networks Ronnie L. Aperocho said red and yellow alerts may extend until June.

“One of the reasons for the deficiency is that there are still three plants (with a combined capacity of 616 MW) in Bataan that are isolated from the grid,” he said.

“There is still no estimate as to when these plants can be synchronized to the grid. But our forecast is that, even if these three plants will be able to go back to the grid because of the increasing power demand during the summer, especially next month, we still see several days of yellow and red alerts and will in fact extend up to the month of June,” Mr. Aperocho added.

Mr. Pangilinan urged regulators to hasten the approval of deals that can boost the country’s power sources.

“The fact is even if all approvals are given to us or procured, hindi ito mangyayari (it will not happen) in the next two to three years. It takes a while for any power plant to be built. I’m afraid, I will probably be critized to say this, but this power issue is going to be with us for the next two to three years. I will just urge the government to get their approval processes done as quickly as we can so that whatever power plants are in the burner can be implemented as soon as possible,” the Meralco chairman added.

Meralco shares on Monday declined 0.26% to P383 each.

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