Manila Times.net
BY EUAN PAULO C. AÑONUEVO REPORTER
THE country’s two biggest players in the power business announced weak first-quarter financial results amid lower demand for electricity.
Manila Electric Co. (Meralco) said its net income went up 6 percent to P2.10 billion in the first three months this year from P1.98 billion last year. This was slower than the more than 100 percent year-on-year increase seen in 2010.
Meralco said the increase this year was “due to the effect of the much delayed implementation of rate adjustments for the 3rd and 4th Regulatory Years of the 2nd Regulatory Period and lower costs and expenses.”
The rate hike for the 3rd Regulatory Year took effect in April 2010 after a voluntary suspension implemented in January 2010, while the adjustment for the 4th Regulatory Year took effect January 2011.
The said rate adjustments form part of the company’s adoption of performance-based regulation (PBR) in 2009, allowing it to increase its distribution charge.
The implementation of the PBR was delayed by nearly three years because of questions raised by consumer groups.
Meralco said its first-quarter revenues however fell by 6 percent to P56.20 billion from P53.02 billion last year due largely to lower average power costs and slightly lower energy sales.
Electricity sales accounted for 98.00 percent of the total revenues.
“Sales to the industrial sector declined as a result of the slowdown in merchandise export, the main driver of energy sales in 2010,” Meralco said.
The electricity sold in the first quarter this year stood at 6,991 gigawatt-hours, down from 6,996 gigawatt-hours last year.
Costs and expenses amounted to P53.70 billion, or 7.00 percent lower than the P50.19 billion over the same period, with cost of purchased power accounting for 83.00 percent of the total.
Meralco’s average purchased power cost, which it passes on to its customers, was P5.84 per kilowatt-hour compared with P6.68 per kilowatt-hour last year. The decline was due to cooler temperatures and slowdown in the economy.
Notwithstanding the slightly lower energy sales, Meralco managed to grow customers by 3.00 percent to over 4.80 million, largely from the commercial and residential sectors.
In a separate report, Aboitiz Power Corp. (AP) said its profit went down by 31 to P5.10 billion in the first three months of the year from P7.40 billion in 2010, because of lower earnings from its power generation business
“Lower average selling price, coupled with a decline in net generation for the period, accounted for the drop in the group’s bottom line performance,” the company said.
The bulk of AP’s profit comes from its power generation business, which earned P4.90 billion in the first three months or 35.00 percent lower than the P7.54 billion in the same period last year.
This was attributed to the cooler climate that resulted in lower demand this year.
“This mainly accounted for the 10.00 percent [year-on-year] reduction in the generation group’s attributable net generation, from 2,418 to 2,168 [gigawatt-hours],” the company said.
Distribution earnings managed to rise by 107.00 percent to P454 million from P219 million mainly because of an increase in its electricity rates.
This was the result of the entry of it two top utilities, Visayan Electric Co. Inc. and Davao Light & Power Co. Inc., into PBR, which mandated an increase in tariffs.
AP’s distribution business grew by 6 percent from 841 to 889 gigawatt-hours, on the back of a 9.00 percent increase in its industrial sales.
Its attributable capacity stood at 2,051 megawatts, a 5.00-percent increase year-on-year.
The growth was due to the completion of the 42.5-megawatt Sibulan hydro project and the 26.00 percent-owned 246-megawatt Cebu coal project.
Meralco shares slipped to P236.20 apiece on Friday from P240.00 the other day, while AP shares fell to P29.25 from P30.10 previously.
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