Meralco expects jump in 2015 electricity sales

MANILA Electric Co. is set to beat this year its average yearly sales growth rate as power users seem to have more gadgets and appliances compared to previous years, company executives said.

However, that higher base could mean lower percentage growth in 2016.

“We have been averaging 3 to 3.5 percent growth in terms of power sales volume over recent years. This year, we could hit 5 to 5.5 percent growth (from year-ago levels). That could put us back to 3 to 3.5 percent growth next year due to base effect,” company president and CEO Oscar S. Reyes said.

Reyes said low oil prices had given motorists savings on fuel expenses, giving them more spending money for gadgets. For businesses, low oil prices resulted in lower transport cost and the overall cost of doing business, which allowed entrepreneurs to invest in more appliances and equipment.

Low inflation and growth in the outsourcing sector also helped fuel a real estate boom, which added to electricity consumption.

Power bill management tools help, as well. Reyes said initiatives such as prepaid electricity, where consumers top up on power load much like a mobile phone load [thus making sure they live within their means in terms of power consumption] has freed up cash flow for home appliances.

Nature also played a key role, Reyes said, noting that the weather turned especially hot not just during the summer but also in the following three months. The peak demand, in fact, was recorded on Aug. 18 this year, Reyes said.

Company chair Manuel V. Pangilinan expressed surprise at the growth in power sales this year and said Meralco would “most likely” meet its core net income guidance of P18.5 billion for 2015.

The company’s forecast of P18.5 billion in full-year core net income this year is slightly higher than the 2014 core net income of P18 billion.

“Surprisingly, the volume of power sold has risen starting May this year such that year-to-date is about 5 percent growth, which is slightly ahead of our expectations and ahead of what the historic growth rate of power sold by Meralco has been; because it’s typically around 3 percent or so,” Pangilinan said.

It should be noted that Meralco’s consolidated electricity sales volume grew three percent to 35,160 gigawatt-hours in 2014 (compared to 2013). With that sales growth, the country’s top power retailer posted a 6-percent increase in core net income growth to P18.128 billion, which is better than the expected P17.8 billion core profit for 2014 (from P17.023 billion in 2013). Reported net income, which include one-off gains, grew 5 percent to P18.1 billion from P17.2 billion 2013.

Sales of Meralco, the country’s largest utility, reflects domestic economic growth, analysts say. After all, the company accounts for about 55 percent of electricity sales nationwide and 75 percent of electricity sales in Luzon, the most economically active island in the country.