Meralco’s third-quarter core profit down 16%

DISTRIBUTION utility ‘confident’ of exceeding P21-billion core income target. — PHILSTAR/MICHAEL VARCAS

MANILA Electric Co. (Meralco) on Monday reported a core net income of P5.14 billion in the third quarter, down 16.3% from a year ago but milder than the fall it posted in the second quarter this year when its customer base was under a strict lockdown.

Total revenues between July and September reached P71.95 billion, lower by 5.5% compared with the same quarter last year.

The utility giant performance during the quarter brought its core net income in the three quarters to September to P15.73 billion, translating into a 15% year-on-year decline because of the slump in revenues and electricity sales.

Gross revenues fell by 11% to P214.21 billion during the nine-month period, dragged down by lower energy sales volume and generation charges, said Meralco Chief Financial Officer Betty C. Siy-Yap during its virtual quarterly briefing.

Revenues from power generation charges stood at P157.74 billion, while distribution revenues were at P50.7 billion.

The company posted a gloomier “reported” profit, which includes one-off items, plunging by 38.6% to P11.25 billion in the same period, attributed to its P2.7-billion share in its investment impairment in Singapore-based PacificLight Power Pte Ltd. in the first quarter.

Year-to-date, the publicly listed distribution utility sold 7% less power to 32,539 gigawatt-hours (GWh) than in the same period last year, according to Meralco Chief Commercial Officer Ferdinand O. Geluz.

It only saw an increase in sales from its residential customers, cornering 39% of total sales.

“We have seen the sales mix shift towards the residential for 2020 as customers continue to stay at home due to work-from-home policies, lockdown restrictions, and most recently, the online distance learning,” Mr. Geluz explained.

Business shutdowns during the strict community quarantines in the past months led to declines in the sales share of its commercial and industrial customers to 34% and 27%, respectively.

On a monthly basis, Meralco recorded positive growth in its total sales in September for the first time after the strict lockdown period. “Consolidated sales were at 4,007 GWh, which is 0.4% higher than the same month last year,” Mr. Geluz noted.

Moreover, its customer count went beyond 7 million last month, with residential customers accounting for 92% or 6.47 million.

The company is “confident” that it can exceed the P21-billion core profit target for this year, Meralco Chairman Manuel V. Pangilinan said in a separate statement.

Core profit grew by 2.1% in the first quarter to P5.72 billion before plunging by 27.7% in the second quarter to P4.86 billion.

“As 2020 comes to a close, we remain to be on the lookout for ways to limit the adverse impact of this pandemic, while remaining steadfast in commitment to keeping the lights on,” the official said.

“We firmly believe that there is opportunity in every crisis and, are hopeful that we will emerge stronger than ever,” he added.

On Monday, shares in Meralco increased by 1.02% to close at P298 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