Meralco eyes P14.5 billion core net income for 2011

MANILA, Philippines — The Manila Electric Co., the country’s biggest power distributor, is targetting to post a core net income of P14.5 billion for 2011, up 19 percent from the P12.2 billion it registered in 2010.

The new profit guidance, which was slightly higher than the P14 billion announced last July, was anchored on prospects of a more economic and energy performance locally, despite the presence of uncertainties in the global economic environment, said Meralco president and CEO Manuel V. Pangilinan.

“We are determined to build further on the gains Meralco has been achieving over the past couple of years,” Pangilinan said in a statement.

At the same time, Pangilinan also announced that Meralco posted a 27-percent increase in its consolidated core net income to P11.66 billion in the first nine months of the year given the increases in volume of energy sold and the number of customers billed.

Consolidated revenues, the bulk or 97 percent of which consisted of electricity sales, increased by 2 percent to P192.94 billion for the first nine months.

Non-electric revenue, comprising 3 percent of consolidated revenues, also rose by 17 percent principally due to the completion of major specialty engineering service contracts through Meralco Industrial Engineering Services Corporation (Miescor) and an increase in third party volume of the payment services business of CIS Bayad Center, Inc.

Consolidated capital expenditures for the first three quarters already reached P4.725 billion, a little over half of the projected P9 billion capex budget earmarked for the year.

These electric capital projects included the construction of new distribution lines to address critically loaded distribution circuits, conversion of odd-voltage systems to the standard 34.5 kilovolt distribution system, improvement of switching flexibility of distribution feeders and replacement of defective power transformers, among others.

In the pipeline are projects that will see the completion of the development of the New Calamba Substation, the expansion of the Diliman and Legazpi Substations, and the commissioning of three new 115 kV sub-transmission lines scheduled for the fourth quarter of this year.

Meanwhile, Oscar S. Reyes, senior executive vice president and chief operating officer of Meralco added that the utility has been making major changes in its business processes, systems and infrastructure to further improve operating efficiency and drive down costs.

Meralco is likewise looking to accelerate the development of new revenue streams that can add value to, and enhance the experience of, its customers in Meralco and various subsidiaries.

In particular, Meralco has been pursuing the construction of its own power generation facilities to better ensure adequacy, reliability and cost competitiveness of its own supply agreements. This is being done through a wholly owned subsidiary, Meralco PowerGen Corp.

The first of these power facilities will be the 600-megawatt coal-fired plant in Zambales, which it is currently building in partnership with the Aboitiz Power Corp. and the local unit of Taiwan Cogeneration International Corp. Substantial development activities have already been undertaken with the aim of bringing these plants into commercial operations by 2015.

“We are inspired by the resilience of the distribution business and aim not only to build on this legacy but also to re-shape the business by competitively re-entering the power generation business and building our other subsidiaries. We are committed to be a formidable player in this space because we believe that a reliable and affordable power industry is basic to national progress,” Pangilinan said.

“We expect to get our first coal-plant on stream by the first quarter of 2015. In the meantime, we are looking at various options to fast-track our development of other generating plants, ”Pangilinan added.