Meralco shares inch down after profit taking

SHARES in Manila Electric Co. (Meralco) inched down following the heightened profit taking by investors amid first quarter earnings.

A total of 2.15 million Meralco shares worth P789.18 million were traded on the local market from April 29 to May 3, data from the Philippine Stock Exchange showed.

The power distribution company was the ninth most actively traded stock last week.

Shares in Meralco fell by 0.92% week on week to P365 per share on Friday from its P368.40 finish on April 26.

Year to date, the stock’s price also went down by 8.5%.

Local financial markets were closed on May 1 for the holiday.

“Meralco was affected by the profit-taking after the market moved up substantially last week,” equity trader at Diversified Securities, Inc. Aniceto K. Pangan said in an e-mail.

Globalinks Securities and Stocks, Inc. Trader Mark V. Santarina said in a Viber message that Meralco’s share price fell a notch following its strong performance in the last week of April which set a high base.

“It’s likely just riding the waves, but the good news is that we observed foreign buyers taking positions in the stock this week. Its earnings report remained good news, but I think it’s already priced in,” Mr. Santarina said.

In the first quarter, Meralco’s attributable net income to the parent company amounted to P9.6 billion, up by 18.1% from P8.07 billion in the same period last year.

Meanwhile, its gross revenue went down by 1% to P104.55 billion in the first quarter.

Energy sales volume increased by 9% to 12,307 gigawatt-hours (GWh) mainly driven by the growth of  the company’s commercial, residential, and industrial segment.

Commercial sales volume increased by 11% to 4,678 GWh while the residential segment saw a 12% increase to 4,144 GWh, due to the “prolonged usage of cooling appliances at home as the dry spells associated with El Niño persisted.”

Sales volume in the industrial segment improved by 3% to 3,448 GWh in the January-to-March period.

“The growth in our first quarter sales volume reflects the growing demand for power from across all customer segments with the improving economic prospects,” Meralco Executive Vice-President and Chief Operating Officer Ronnie L. Aperocho said in a press release.

Analysts expressed optimism about the stock company following its plans to build micro modular nuclear power plants to provide energy in remote areas in the Philippines within the next four years.

“In the short term, we’ll be closely monitoring interest rates and other economic factors. Looking further ahead, it’s encouraging to see Meralco’s commitment to investing in renewable energy and exploring alternative sources such as nuclear power,” Mr. Santarina added.

In a disclosure, the company said it has started conducting a full feasibility study with US-based company Ultra Safe Nuclear Corp. (USNC) for the installation of micro-modular reactors (MMR) in the Philippines, following the completion of its pre-feasibility study.

The study aims to ensure that the locations are safe places to build micro modular reactors, which is likely to be completed by 2028.

Looking back, Meralco and USNC signed a cooperative agreement last November to study the potential deployment of one or more micro modular reactor systems in the country.

Mr. Santarina expects Meralco to record its first-quarter net income at P6.5 billion and P35.5 billion for the full year.

For the week, he pegged the stock’s support at P358, while resistance was at P370.

Mr. Pangan placed Meralco’s immediate support at P364 and resistance at P370 per share. — Mariedel Irish U. Catilogo