The Manila Electric Co. (Meralco) is poised to exceed its core net income guidance of P17 billion for 2013 given trends in the first six months of the year.
In a briefing, officials revealed that the company posted higher core net income (which excludes one-time, exceptional charges) for the first nine months of 2013 to P13.6 billion on lower operational cost and higher electricity sales.
“Continued sales will allow us to do a bit better than the full year guidance of P17 billion,” company chair Manuel V. Pangilinan said. He said growth will be driven mainly by residential and commercial accounts.
Meralco’s consolidated net income also stood at P13.6 billion. Core earnings per share at P12.029 while reported earnings per share was P12.105.
Consolidated revenue, 99 percent of which come from electricity sales, dropped 3 percent to P208.1 billion due to significantly lower average price of purchased power under five new power sales agreements (PSAs) implemented earlier this year. These PSAs accounted for about 55 percent of total purchased volume. The 5 percent growth in electricity sales volume was buoyed by the sustained healthy demand from the commercial and residential segments, which grew by 5.5 percent and 5.6 percent, respectively, assisted by a 3.1 percent growth from industrial customers. Wholesale Electricity Spot Market (WESM) charges peaked at P25.95 per kWh in February, the impact of which was partly offset by the lower average generation cost from other sources of P4.83 per kWh.
Energy sales grew almost 5 percent growth despite a major weather disturbance last Aug. 19, 2013, which resulted in an estimated 17.9 GWh of unserved energy. At the height of Typhoon Maring, Meralco said it was constrained to de-energize several circuits to ensure the safety of residents in severely flooded areas of Metro Manila, Rizal, Laguna, Bulacan and Cavite. Billed customers grew to 5.3 million, with over 136,000 new customer accounts since the beginning of the year, reflecting a sustained growth of 3 percent per year over the last four years.
Non-electricity revenue grew by 68 percent principally due to higher volume of construction and service contracts.
Consolidated costs and expenses reached P188.7 billion, 5 percent lower than the same period in 2012. There was no new major operating expenditure during the period, Meralco said.
“Our proven track record in delivering reliable electric service was most evident at the height of Typhoon Maring. Despite torrential rains, the entire distribution system was up and running, except in areas where public safety required us to de-energize. Power was restored as soon as the flooding subsided,” company president and CEO Oscar S. Reyes said.
The company’s operating performance during the period reflected continuing improvements over 2012. The company’s 12-month moving average system loss was at 6.71 percent as at Sept. 30 or 1.79 percentage points better than the regulatory cap of 8.5 percent, the lowest yet achieved in the company’s 110-year history. The improvements in system efficiency and system reliability helped the company realize incremental energy sales estimated at an aggregate 127 GWh for the nine-month period.