Meralco expects flat profit

Posted on July 13, 2016
http://www.bworldonline.com/content.php?section=Corporate&title=meralco-expects-flat-profit&id=130337

MANILA ELECTRIC Co. (Meralco) expects this year’s profit to be around the same level as the previous year, its president said on Tuesday.

“It’s more or less same level as last year,” Oscar S. Reyes, Meralco president, said on the sidelines of the BusinessWorld Economic Forum at Shangri-La at the Fort, Bonifacio Global City in Taguig City.

“Last year we made P18.8 billion, so not far from that,” he said, when asked about the distribution utility’s net income guidance for 2016.

“Sales have been strong. For the first half, the latest numbers were a little over 10% year on year,” he said, adding a possible growth rate ranging between 10% to 11%.

He attributed this to the “very warm weather,” caused by the El Niño phenomenon that peaked through May.

“And secondly, the economy has been doing very well particularly real estate,” Mr. Reyes said. “Growth has come from residential, commercial and industrial [business segments]. Residential growth has been very, very strong in terms of sales -- high double digits.”

On the downside, he said although sales have been up, the average distribution rate, from which the company derives its revenues, has been lower during the period compared with the figure a year ago.

Meralco will be reporting its first-half sales and income figures on July 25.

In the first quarter, the company reported a 4% increase in core net income to P4.6 billion after a significant jump in energy sales volume due to the hot temperature that kept consumption higher than a year ago.

Electricity sales during the first three months rose by 12%, which was a record for the country’s biggest distribution utility.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is party owned by Philippine Long Distance Telephone Co. (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls.