Meralco net profit slumped 43% in first semester

Manila Electric Co.’s consolidated net income in the first semester fell by 43 percent year-on-year to P6.8 billion as the new coronavirus pandemic eroded its business, but company officials said six-month results provided some encouragement with volumes nearing pre-pandemic levels.

For January to June, Meralco’s core net income fell by 14 percent to P10.6 billion as did gross revenues, which settled at P142.3 billion.

In a press briefing, Meralco chief finance officer Betty Siy-Yap said that with the easing of restrictions to general community quarantine, the distribution giant’s touch points — its business centers, payments centers and third-party channels like banks — cash flow was slowly recovering.

“The daily cash collections have gradually risen, moving closer to the pre-ECQ (enhanced community quarantine) level of a daily average of over P1 billion,” Siy-Yap said.

She said electricity sales volume was 7-percent lower at 21,139 gigawatt-hours, the cost of purchased power was also lower thanks to lower generation charge, spot market prices and the “force majeure” claims.

Such claims spared Meralco from its contractual obligations of paying some suppliers for a set amount of energy even if this was not used — the take-or-pay scheme. These have so far spared customers a total of P1.8 billion, officials said.

Due to the ECQ and the resulting drop in electricity demand, Meralco was not able to accept or buy the contracted amount of energy from such suppliers.

Meralco president and chief executive Ray C. Espinosa said that, for the remaining five months of 2020, the company was ensuring businesses of all sizes were ready to bounce back.

“We are looking at their requirements and ensuring that we are ready to energize them when and as needed,” Espinosa said.

Meralco chair Manuel V. Pangilinan said they expected full-year net income to reach about P21 billion in 2020. INQ