Strong earnings seen for MVP-led firms in ’11
MANILA, Philippines—Philippine Long Distance Telephone Co., Manila Electric Co. and Philex Mining Corp.—companies led by businessman Manuel V. Pangilinan—are seen performing better this year than last year in terms of higher revenues and core net incomes.
In a briefing Thursday, Pangilinan, who is also the president and CEO of Meralco, said the electricity distribution utility was expected to report improved revenue in the first quarter due to higher electricity prices caused by increased generation and distribution costs.
In terms of volume, however, sales have likely remained flat compared with year-ago level, Pangilinan added.
Meralco chief operating officer Oscar Reyes explained that some of the factors that led to a robust performance in 2010 were no longer present this year. These included the El Niño weather phenomenon, which boosted demand for electricity to run climate control devices.
Last year, electricity sales surged by 10 percent, the highest growth recorded in 13 years. For this year, Meralco expects electricity sales to grow by 3.5 percent.
The company is expected to release its first-quarter figures Friday.
For PLDT, Pangilinan said the core net income it posted in the first quarter was “slightly better than we expected.”
He said the surprise came from the fact that PLDT even “guided down its core net income” for 2011 due to intense competition with rival telecommunication companies.
Pangilinan explained that profit this year would not be as high as that seen in the past, as the race among telcos might further heat up in the months ahead, pushing margins down.
PLDT is set to release first-quarter figures by Tuesday next week.
As for Philex Mining, Pangilinan said the mining firm was confident of posting growth this year, slightly exceeding last year’s core net income of about P4 billion, from a pricing and production standpoint.
“Core net income this year is better than last year because of better prices, better production and better yield on metals. So far, despite the slight weakness, metal prices are still ahead [compared with] last year. What would impact negatively is [the] exchange rate,” Pangilinan said.
Philex has yet to give its profit guidance figures for 2011, but it intends to do so after the first half of the year. Last week, Philex reported that its first-quarter core net income and reported net income surged because of higher metal output and price levels.
Philex said it booked a 156-percent increase in its first-quarter recurring net income to P1.33 billion from P520.1 million in the same period last year. Reported net income for the quarter—which includes income from non-core activities—amounted to P1.31 billion, more than twice the P521.3 million recorded in the same quarter last year.
