Meralco sees slight growth in 2012 net profit

Manila Electric Co. expects its core net income to increase conservatively by 0.7 percent to P15 billion this year from P14.9 billion in 2011 due to an expected decline in distribution tariffs for 2012.

In a briefing Monday, Meralco president Manuel V. Pangilinan explained that the company’s revenues and profits were “very sensitive to tariffs,” which are set to decline from the current P1.5828 a kilowatt-hour (kWh) between now and 2015.

Pangilinan admitted that this was a “conservative” yet “realistic” growth target and would prompt Meralco to be more efficient and vigilant in terms of expenditures.

The volume of electricity sales, Pangilinan added, was likewise expected to grow 3 percent due to an increase in demand as well as growth in customer count, which has already breached the 5-million mark as of end-2011.

“Our assessment is that the economic outlook for this year will be better than 2011, despite the fact that Europe will continue to have problems—even as the debt crisis will be finally resolved. It will take a while for Europe to gain its strength. But Asia, on the other hand, will continue to be strong, particularly China, India, Indonesia and Singapore,” Pangilinan explained.

“For the Philippines, we believe that economic prospects will be better this year than last year with government spending likely to rise along with consumer spending, strong remittances will continue and the economy will be recovering. China and India will be stronger, so that means exports should be better given those better prospects for economy,” he added.

Meralco posted a core net income of P14.88 billion last year, up 22 percent from 2010. Consolidated revenues, which substantially represented electricity sales, rose 7 percent to P256.8 billion last year. The increase was attributed to the 1-percent increase in sales volume over the record 2010 level, higher transmission charge and slightly higher distribute rate. The volume of energy sold last year reached an all-time high of 30,592 gigawatt-hours.

Consolidated capital expenditures for 2011 amounted to P8.7 billion, the bulk, or 89 percent, of which went to electric capital projects.

Meanwhile, Meralco officials also disclosed in Monday’s briefing that it has signed seven-year power supply agreements to source additional electricity from the 600-megawatt Calaca coal-fired power plant; Masinloc coal facility of US-based AES Corp.; and the 1,200-MW Ilijan natural gas power facility, which is being managed by its independent power producer administrator South Premiere Power Corp., a subsidiary of conglomerate San Miguel Corp.