Meralco profit up 23%
By Abigail L. Ho
Philippine Daily Inquirer
First Posted 00:54:00 05/06/2008
Manila Electric Co. (Meralco), the country’s largest power distributor, reported Monday a net income of P655 million in the first quarter, up 23.2 percent from P532 million in the same period last year.
In a report to the stock exchange, Meralco said energy sales grew 1.9 percent to 6,156 gigawatt-hours (GWh) in the first quarter, slowing downing from a 3.7 percent pace in the year-earlier period, as the Holy Week—a period of slow demand—came in March this year instead of April.
Revenues dropped 9.5 percent year-on-year to P43.64 billion from P48.2 billion, with lower average generation and system loss charges for the period.
Distribution revenues increased 2.7 percent to P5.8 billion from P5.65 billion.
The commercial segment remained as the biggest contributor to Meralco’s overall sales in the quarter, rising 4.1 percent to 2,388 GWh. The company said the increase was in the transport, storage and communication sector, real estate sector and trade sector. It said 12 new commercial customers together increased demand by 8.7 megawatts.
Sales to the industrial segment—led by the beverage, transport equipment manufacturing and basic metal sectors—grew 1.9 percent to 1,795 GWh in the first quarter, the company said. It said 14 new industrial customers signed up with a combined demand of 10.4 megawatts.
The residential segment registered a slight decline of 0.6 percent to 1,938 GWh because of the earlier Lenten season and the relatively lower temperature during the first three months of the year.
For the whole of 2007, Meralco recorded a net income of P3.61 billion, down 73 percent from P13.38 billion in 2006. It registered revenues of P195.61 billion, up 5.1 percent from P186.08 billion in 2006, attributing the increase to a 4.6-percent growth in overall energy sales to 26,219 GWh.
Meralco said its 2007 profit would have been higher than in 2006 if not for reversal of probable losses that it booked two years ago. It said its 2006 net income would have been P3.16 billion if not for a write-back of P15.73 billion in provisions for probable losses booked for several quarters in relation to a case pending in the Supreme Court.
Meralco started making provisions for probable losses three years ago in preparation for a possible negative decision by the Supreme Court.
The Court of Appeals in 2004 rendered void the approval of the Energy Regulatory Commission (ERC) of Meralco’s application for “unbundling” rates—breaking them down into components, which led to an increase of P0.17 per kilowatt-hour in the rates.
Of the ERC-approved rate increase, P0.0835 per kWh went to the government-ownedNational Transmission Corp. as payment for transmission charges and P0.08.65 per kWh went to Meralco as payment for distribution charges.
In December 2006, the Supreme Court overturned the Court of Appeals decision and ordered the ERC to call for an audit of Meralco’s books by the Commission on Audit to determine whether the rate increase was justified.
Edited by INQUIRER.net
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