Meralco sees 2019 profit at P23 billion

By Lenie Lectura - July 30, 2019

https://businessmirror.com.ph/2019/07/30/meralco-sees-2019-profit-at-p23-billion/

THE Manila Electric Co. (Meralco) sees profit this year to reach “at least” P23 billion after the utility firm posted P12 billion in net income from January to June.

“I would say at least P23 billion this year to be safe,” said Meralco Chairman Manuel V. Pangilinan after the company presented its first-half financial and operating results.

In 2018, the utility firm posted P23.1 billion in net income from P20.5 billion in 2017. Core profit last year also jumped to P22.4 billion, 11 percent higher than the P20.2 billion in 2017.

At end-June this year, Meralco’s core income stood at P12.31 billion, up by 14 percent from the same period last year. Net income was flat at P12 billion, from P11.97 billion.

On a quarterly basis, Meralco’s second-quarter net income was down by 5 percent to P6.33 billion, from P6.66 billion. Core profit was up by P6.71 billion from April to June this year, from P5.93 billion in the same period a year ago. Revenues for the first six months of the year reached P164.95 billion, up by 10 percent from P150.54 billion in the same period a year ago. This was mainly due to increased generation charge, peso depreciation and increase in energy sales volume.

The company’s second-quarter revenues stood at P89.57 billion, up by 12 percent from last year’s P79.73 billion.

For Meralco to post P23 billion in net income this year, its net income would have to reach at least P11 billion in the second half.

Despite conservative projections, Pangilinan is optimistic that this year would be “better” than last year, buoyed by higher electricity sales volume due to strong demand.

“It will be volume-driven. For July, it was pretty strong, 3.3-percent increase. We are quite optimistic we will be better from last year,” he said.

Meralco sold 22,823 gigawatt-hours (GWh) of electricity for the first half of the year, up by 5 percent from the same period last year. It recorded 6.7 million customers at end-June, or a growth of more than 4 percent year-on-year.

“Even while the year started slow with energy sales volume growing only by 2 percent in the first quarter, the grid was soon saddled with a series of red and yellow alerts starting March as a result of maintenance and forced outages,” said Meralco President Ray Espinosa.

“The supply capacity was further challenged with the increased consumption as temperature rose to 30.1°C, the highest average temperature for the month of June, in the last five years. Given this, we are focused on sourcing at the best possible least cost and on ensuring adequate stacking to minimize, if not avoid, power interruptions,” Espinosa added.

Meralco’s cost and expenses at end-June stood at P149.6 billion, higher by 9 percent than the figure recorded a year ago.

Meralco spent P10.7 billion in capital expenditure for the first six months.

The Meralco board approved a cash dividend of P5.46 per share to all shareholders of record as at August 28, payable on September 20.