MANILA ELECTRIC CO. (Meralco) saw its core net income dropped 14% to P10.6 billion in the first six months of the year with lower revenues and sales.

Its consolidated revenues dwindled 14% to P142.3 billion in the period “as a result of the combined effect of the 7% decline in sales volume and lower pass-through generation charges as fuel prices remained low,” said Meralco’s Chief Financial Officer Betty C. Siy-Yap during the company’s first-half earnings briefing, Monday.

The company’s electricity revenue, forming 97% of the total, dropped 14% to P138.6 billion, mainly due to lower volumes and pass-through charges.

Revenues from generation and other pass-through charges also decreased by 18.3% to P105.27 billion. Lower generation cost with the implementation of new power contracts and the utility’s force majeure claim from power suppliers, among others, led to the lower revenue share of this component.

Further, distribution charges increased by 2.8% to P33.37 billion.

Meralco’s reported net income is gloomier, down 43% to P6.8 billion due to its share in the P2.7-billion investment impairment of Singapore-based PacificLight Power Pte Ltd. in the first quarter.

In a separate statement, Meralco Chairman Manuel V Pangilinan claimed that “Meralco performed quite well,” despite the challenges it faced in the period, such as the limitations caused by the pandemic-induced lockdown.

He noted the uncertainty caused by the coronavirus disease 2019 (COVID-19), albeit, highlighting also “some encouragement” from the company’s first-half results.

From January to June, Meralco sold a total of 21,139 gigawatts per hour (GWh) of electricity, which is 7% lower compared to a year ago.

Only its residential sale expanded by 14%, making up the bulk of its total sales volume at 38%, as customers use more electricity while kept indoors due to quarantine restrictions.

Its commercial and industrial sales volumes were both down 17%. The former is expected to rise with more businesses opening at limited capacity, while there is an observed increase with the latter as export-oriented companies also run at half to full capacity.

“Meralco recognizes its critical role in enabling industries, and now more so, as business restart and transition to the ‘new normal’,” Mr. Pangilinan said.

The utility noted a 3% growth in its customer base, an additional 200 million, to nearly 7 million, which were brought in before the lockdown months.

Meanwhile, the company utilized about 51% or P4.7 billion out of its P9.34-billion capital expenditure budget in the first half. A bulk of this, or P2.42 billion, was spent on new connections.

“Out of this amount, close to P80 million was utilized for the quick energization of COVID-19 quarantine and treatment facilities all over our franchise [areas],” said Meralco Networks Head Ronnie L. Aperocho.

Mr. Pangilinan said the company is “moving with caution” though it is still optimistic for a near-term recovery.

The company expects its core profit to stand around P21 billion by end-2020, according to Mr. Pangilinan.

On Monday, shares in Meralco slipped by 1.15% to P258 each.

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 a stake in BusinessWorld through the Philippine Star Group, which it controls. — Adam J. Ang