Meralco sales recover, profit seen up

Manila Electric Co. (Meralco) sees its core business becoming more profitable this year despite initial softness in energy sales.

Meralco chair Manuel V. Pangilinan said the company’s core net income for 2014 was seen to reach P17.8 billion from about P17.02 billion in 2013.

Meralco posted a 7-percent growth in net income in the first nine months of the year to P14.308 billion from P13.6 billion in the same period last year, said company chief financial officer Betty C. Siy-Yap.

Core income in the first nine months reached P14.3 billion, up from P13.6 billion in the same period last year.

Revenue in the first nine months reached P199 billion, 3.1 percent lower than the P205 billion posted a year ago. Core earnings per share was at P12.68 (from P12.03) while reported earnings per share was at P12.69 (from P12.11).

Energy sales recovered from a sluggish first quarter, posting a 2.5- percent growth in the first nine months from the same period in 2013, Meralco president and CEO Oscar Reyes said.

Sales growth would have reached 3.5 percent if not for foregone sales of 263 gigawatt-hours due to service disruptions amid typhoons Mario and Glenda.

It may be recalled that Meralco’s income was slightly down in the first quarter as the cool temperature in the first three months of the year 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 2014 from P4.024 billion in the first quarter of 2013.

Reyes said energy efficiency efforts by customers were also playing a big role in how energy sales develop. 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.

For the rest of the year, sales are expected to keep recovering. However, this will be tempered by a P0.10 per kilowatt-hour decrease in distribution charges for the second half of 2014 due to an annual regulatory review in rates that kicked in July.

In terms of capital spending, Reyes said Meralco was programmed to spend about P11.5 billion this year. This is expected to increase to P13.5 billion next year.