Meralco posted P7.8-b profit in 1st half

Manila Standard Today

by Alena Mae S. Flores

Manila Electric Co., the country’s biggest power distributor, expects core net income this year to reach P14 billion, up 15 percent from last year’s, after booking a hefty profit in the first six months of the year.

Core net income in the January-to-June period hit P7.8 billion, up 35 percent from P5.8 billion year-on-year.

“On the basis that our electricity sales in the second half this year will be broadly similar to that realized in the first half, and reflecting slightly lower distribution tariffs... we are guiding our core net income for the full year 2011 at P14 billion, 15 percent better than last year,” Meralco president and chief executive Manuel Pangilinan said in a briefing Monday.

Reported net income in the first half amounted to P6.1 billion, up 26 percent from P4.8 billion on year.

Meralco officials said the implementation of the tariff adjustment under the performance-based rate scheme, higher volume sold to commercial customers and lower operating costs resulted in the company’s better financial performance in the first half.

“The lagged effect on the global economy of the recent earthquakes is highly visible and has, to a certain extent, resulted in lower-than-expected growth for the company. However, the operating efficiencies have contributed to significant improvements in the overall performance of Meralco... We are committed to deliver on our dividend policy, barring any unforeseen events,” Manuel Lopez, Meralco chairman, said.

The Meralco board approved the payment of an interim cash dividend of P3.45 per share based on a 50-percent dividend payout of the company’s first half core net earnings.

Total energy sold during the period reached 14,781 gigawatthours, or 1 percent lower on year.

The commercial sector accounted for 39 percent of sales, with a steady volume noted from the real estate, transport and communications sectors. The residential sector accounted for 31 percent due to cooler weather and earlier monsoon rains.

It said the impact of the Japan earthquake on the electronics and automotive parts industries was reflected in lower industrial sales volume, which accounted for 29 percent in the first half.

Meralco said the growth in customer count, now estimated over 4.9 million, and the modest increase in commercial sales and improved average distribution rate sustained the company’s operating results during the period.