Meralco 3rd quarter income declines 5.8% to billion

The reported net income of Manila Electric Company (Meralco) had been pared 5.8 percent to 4.4 billion in the third quarter from a more buoyant profit level of 4.67 billion in the same period last year.

The pulled down profitability had been mainly attributed to the lower distribution charges approved by the Energy Regulatory Commission (ERC) for the utility firm from a heftier 1.63 per kilowatt hour (kWh) previously to 1.52 per kWh.

Meralco senior vice president Betty Siy-Yap noted that the company had also been affected by “net lower passthrough charges” attributable to lower generation costs of power providers.

The other softening factor on its bottom line for the period had been “loss of contestable revenues to other RES (retail electricity suppliers).”

For the first nine months though, the company’s reported net income was still higher at 16.149 billion from last year’s 14.308 billion. Core income also climbed 11.0-percent to 15.795 billion from the year-ago level of 14.286 billion.

The utility firm has expounded that “consolidated revenues of which electricity sales accounted for 97% decreased by 3.0% to 197 billion,” due to the specified factors.

The saving grace for the company had been increase in revenues from subsidiaries, including that of its Meralco Industrial and Engineering Services Corporation (Miescor); Meralco Energy Inc. (MServ); CIS Bayad Center Inc. and Radius Telecoms Inc., among others.

The company similarly reported brisk energy sales in the first nine months – with average growth of 4.7-percent. October was seen most upbeat with sales growth hitting 7.6percent.

Meralco Chairman Manuel V. Pangilinan set out that the 18.5 billion profit guidance for the utility firm would still be achievable even if the bullish energy sales growth would no longer be sustained in the last two months of the year.

The utility firm stressed that “growth prospects for the Philippines remain favorable with the economy largely unaffected by recent global volatility.”

It emphasized that “domestic consumer spending continues to offset sluggish export demand, fueling growth throughout the third quarter of 2015.”

Meralco said the growth in energy sales can be largely traced to “new customer connections which grew 4.0percent; higher demand across all customer classes particularly residential and commercial spurred by record low inflation of 0.4-percent in September 2015; and six year record high temperature of about 36 degrees centigrade; and a record high peak demand of 6,298 megawatts in August, 2015.