Meralco sees banner year
MERALCO -Higher distributed energy volumes and improved performance in power generation lifted the earnings of Manila Electric Co. (Meralco) by 44 percent in the first nine months to P28.4 billion despite costlier power purchases.
Meralco chair Manuel Pangilinan said on Monday full year core net income was “likely to land” at P37 billion.
“Given the robust performance of practically all of our businesses, it is likely that Meralco will deliver another year of record earnings consistent with its long arc of earnings growth these past 14 years,” Pangilinan said.
Excluding nonrecurring items, or those not typically part of its main business, Meralco’s consolidated core net income from January to September rose to P30 billion from P19.6 billion in the same period last year.
Consolidated distribution utility sales volumes rose by 4 percent in the nine-month period, reaching 38,164 gigawatt-hours (GWh). The commercial segment remained its top customer, accounting for 37 percent of the total energy sales mix from last year’s 35 percent.
Residential sales, meanwhile, remained at 35 percent. The industrial segment’s share slightly dropped to 28 percent from 29 percent.
Meralco executive vice president and chief operating officer Ronnie Aperocho remained optimistic that his company would maintain high sales but was cautious of higher gas prices as output from the Malampaya gas field continued to deplete.
“While we expect this to continue for the rest of the year, we also remain mindful of the upward trend in power rates with the anticipated increase in Malampaya gas prices and the continuing supply reduction of this gas field,” Aperocho said.
“Nonetheless, Meralco remains committed to ensuring continuity of supply and will be conducting a series of competitive selection processes in the coming months in accordance with the recently approved guidelines,” he added.
The cost of purchased power from suppliers, however, climbed by 5 percent to P248.8 billion due to a weaker peso and higher costs of replacement power for terminated capacity coming from the Ilijan gas-fired power plant and the Sual coal-fired power plant.
To recall, the Court of Appeals in June this year allowed San Miguel Energy Corp. and South Premiere Power Corp. to cease supplying 330 megawatts (MW) and 670 MW, respectively, to Meralco.
These power supply agreements had been signed in 2019, but the two companies issued termination notices to Meralco in October last year due to a surge in fuel costs.
Earlier this year, San Miguel Corp. units Excellent Energy Resources Inc. and Masinloc Power Partners Co. Ltd. also terminated their contracts with Meralco for a total of 1,800 MW of capacity that must be available by December 2024.
Meralco began looking for new suppliers last week, and bids must be submitted by Dec. 26.
READ: Meralco starts bid process for 1,800MW of power supply
As for its power generation business, subsidiary Meralco PowerGen Corp. (MGen) nearly tripled its net income contribution to P10.2 billion, driven by “continuing positive performance” of Singapore-based Pacific Light Pte. Ltd.
Meralco said PacificLight recorded a consolidated core net income of P13.4 billion, a 48.9-percent increase from the previous year’s earnings.
San Buenaventura Power Ltd. Co., MGen’s 455-MW coal-fired power plant in Quezon province, likewise saw an improvement in earnings to P2.9 billion from P2.6 billion in 2022.
