Higher electricity sales drive Meralco’s profit

MANILA ELECTRIC Co. (Meralco) reported a net income of P4.46 billion in the fourth quarter of 2017, up 27% compared with P3.5 billion a year earlier as new consumer accounts and high consumer spending boosted electricity sales, the distribution utility said on Monday.

MANILA ELECTRIC Co. (Meralco) reported a net income of P4.46 billion in the fourth quarter of 2017, up 27% compared with P3.5 billion a year earlier as new consumer accounts and high consumer spending boosted electricity sales, the distribution utility said on Monday.

“[ Fourth- quarter 2017] sales volume [at 10,701 gigawatt-hours] is 7% higher than 10,039 GWh in the fourth quarter of 2016 mainly due to new residential accounts and ramp- up of accounts energized in 2016 complemented by high consumer spending,” said Betty C. Siy-Yap, Meralco senior vice-president and chief finance officer, in a press conference.

Adjusted for one-time transactions, core net income rose by 5% to P4.84 billion for the October to December period, from P4.62 billion previously.

“For the commercial sector, the real estate, hotels and restaurants and retail trade drove the volume growth,” Mr. Siy-Yap said. “On the industrial front, semiconductor, basic metals, food and beverage industries continued to provide additional volumes.”

For full-year 2017, Meralco core net income rose 3% to P20.2 billion, before exceptional items. Reported net income was up 6% to P20.38 billion.

Core income excludes the effect of foreign exchange gains or losses, impairment charges, mark- to- market adjustments, gain on disposal of investment and other one-off items.

“2017 turned out to be another good year for Meralco,” said Oscar S. Reyes, Meralco president and chief executive officer, citing an improvement on both the commercial, operating and financial fronts.

Consolidated energy sales volumes went up by 5% to 42,102 GWh despite the cooler temperatures during the first four months of 2017. Meralco breached the 41,000- mark at 41,528 GWh, while unit Clark Electric Distribution Corp. posted 574 GWh.

Mr. Reyes attributed higher energy sales to the “combined effects” of a growing customer base and positive economic conditions, with gross domestic product growth of 6.7%, moderate inflation at 3.2% and the softening of the peso at P49.93 to a dollar. He also cited stable power supply and lower power plant outages.

The Meralco official said billed customers continued to grow at a healthy 5%, with a year-end tally of 6.3 million accounts or a net additional 288,000 customers.

Mr. Reyes said 2017 ended with no significant rate issues, with the average retail price recorded at P8.03 per kilowatt-hour ( kWh), the second lowest since 2010, although P0.53 per kWh higher than the 2016 rate.

Gross revenues increased by 10% to P282.6 billion in 2017, as result of higher volume and pass-through generation charges resulting from rising fuel prices and the weakening of the peso.

“Electricity growth continues to be a barometer of the economy’s expansion. In 2017, consumption on the demand side, and services on the supply side, remained to be the mainstay of the economy, contributing to the 6.7% GDP growth,” Meralco Chairman Manuel V. Pangilinan said in a statement.

Mr. Pangilinan said Meralco is well-positioned to support the government and enable the government’s “Build, Build, Build” infrastructure program aside from the anticipated approval of unsolicited proposals covering rehabilitation, maintenance and operations of the country’s infrastructure facilities.