Earnings of the Manila Electric Co. (Meralco) dipped slightly as the cool temperature in the first three months of 2014 tempered electricity use by most of its customers.
Consolidated net income was down 0.4 percent to P4.008 billion in the first quarter of this year from P4.024 billion in the first quarter of 2013, chief financial officer Betty C. Siy-Yap said in a briefing.
The company’s consolidated core net income, which excludes one-off gains, reached P4.088 billion or 1.6 percent lower than last year’s P4.024 billion.
Revenue dropped to P55.109 billion—15 percent lower than the P64.828 billion booked during the same period last year—due to lower electricity revenue. Yap attributed the drop to the combined effect of a billing adjustment by the Philippine Electricity Market Corp. (PEMC) for power purchases from the Wholesale Electricity Spot Market in December 2013 based on an order of the Energy Regulatory Commission (ERC), as well as the shift of supply to contestable customers who opted to be served by other retail electricity suppliers. Settlement of the PEMC billing adjustment will depend on the final decision of ERC.
“PEMC recalculated the amount and sent a negative bill to Meralco amounting to P9.3 billion [for the November supply month]. We recognized that as reduction in purchased power costs and reduction in liability, therefore corresponding reduction of revenue and receivable,” Yap said.
Energy sales grew just 1.7 percent to 7,908 gigawatt hours (GWh) from 7,777 GWh in 2013, president and CEO Oscar S. Reyes said. Strong growth in industrial segment propped up Meralco sales despite reduced household consumption amid lower temperature, concerns on high power prices and slight uptick in inflation, he said.
Non-electricity revenue were generated mainly from the services business of the operating subsidiaries, officials said. Meralco Energy Inc. or MServ increased contribution on the back of power consumption and reliability maintenance services to commercial and industrial customers.
In terms of customer base, Meralco registered 5.42 million clients as of end-March, up 3.5 percent from 5.23 clients last year. More than 90 percent of customers are households, said SVP for customer retail services Alfredo S. Panlilio.