Meralco profit sizzles at P9.6B amid high heat
Higher energy sales due to the greater use of air conditioners to beat the scorching heat, powered Manila Electric Co.’s (Meralco) first-quarter profit despite a slight dip in the top line.
Meralco said consolidated net income reached P9.6 billion in three months ending March, an increment of 18.9 percent, on the back of higher energy sales.
Despite this, revenues posted a 1-percent drop to end at P104.5 billion, due to lower pass-through charges and energy fees.Consolidated core net income (CCNI), or profits derived from a company’s main business excluding nonrecurring income and expenses, jumped by 11.5 percent to P10.1 billion.
The distribution giant reported that energy sales rose by 9 percent to 12,307 gigawatt-hours (GWh), mainly driven by higher consumption of residential and commercial segments.The residential segment posted an 11.9 percent growth to hit 4,144 megawatt-hours (MWh) as households use cooling appliances more to find relief from higher temperatures.
“An approximate 2.5 MWh of consumption per day is noted for every degree rise in temperature,” Meralco said.
Commercial sales volume expanded by 11.1 percent to 4,678 MWh, surpassing the prepandemic performance in 2020, fueled by increased business activities and strategic expansions in real estate, retail trade and hotels.
Meralco said this was driven by the demand for office spaces in central business districts, along with mall operators expanding and repurposing spaces that attracted more customer visits.
“Hotels, educational institutions, and restaurants had significant consumption upswing due to sustained increase in in-person events, with higher usage of cooling equipment to ameliorate increasingly warmer ambient temperatures,” it said.
The industrial segment consumed more power by 3.3 percent to 3,448 GWh, mainly the semiconductor sector as well as manufacturers of food and beverage and plastics.
Meralco counted 7.9 million customers during the first quarter, up by 2.7 percent.
Meanwhile, the average retail rate inched up by 3.5 percent to P10.78 per kilowatt-hour.
Meralco chair Manuel Pangilinan said the listed firm’s performance is expected to be sustained throughout the year, projecting a CCNI of more than P40 billion for 2024.
“The distribution utility business has been performing very well for the first quarter and that performance continues with the balance of the year for the next three quarters, especially this time in April, and perhaps continuing through May when warm weather is predicted to persist,” Pangilinan said.
The company’s power generation arm Meralco Powergen Corp. contributed P2.7 billion or 27 percent of CCNI for the quarter.
Pangilinan said the “very good” performance of the distribution business and retail electricity supply “picked up the slack” of its generation business. But he added that “we expect to do better in the latter nine months.” INQ
