Meralco expects better power revenue in 2018

By Lenie Lectura - January 22, 2019

https://businessmirror.com.ph/2019/01/22/meralco-expects-better-power-revenue-in-2018/

THE Manila Electric Co. (Meralco) is expected to post better results for 2018 compared to the previous year mainly on account of improved electricity sales.

“Quite well. The profits could be ahead of 2017,” Meralco Chairman Manuel Pangilinan said.

For full-year 2017, Meralco recorded a 3-percent increase in core net income at P20.2 billion, before exceptional items. Reported net income was up 6 percent to P20.38 billion.

Core income excludes the effect of foreign-exchange gains or losses, impairment charges, mark-to-market adjustments, gain on disposal of investment and other one-off items.

Revenue for 2017 was 10 percent higher at P282.55 billion, from P257.18 billion in 2016. Of this, electricity revenues amounted to P275.2 billion, while the remaining P59.6 billion accounted for distribution revenue.

The power-distribution utility firm was expecting electricity demand for 2018 to grow by 4.5 percent to 5 percent from 2017. Actual figures have yet to be released.

Pangilinan noted that demand for electricity is “quite strong” for the fist few days of the month.

“We remain optimistic on Meralco’s prospects,” Pangilinan commented, adding that forecast for this year “would have to wait.”

Meralco President Oscar Reyes had said the company might end 2018 with about 4.5-percent to 5-percent sales growth, which could be attributed to increased consumption from all consumer segments.  At end-September last year, Meralco recorded 6.5 million customers.

In 2017, energy sales volumes grew by 5 percent to 42,102 gigawatt hours, brought about by a growing customer base, positive economic conditions, stable power supply and low power-plant outages during the year.

This was underpinned by customer retail and networks initiatives to accelerate new customer acquisitions and energization, and to minimize distribution system interruption, Meralco said.

The Meralco official noted developments in the sector that could slow down electricity consumption. These include cooler temperature, higher inflation, interest rates, weaker peso and increasing adoption of rooftop solar, battery and energy storage, which adversely affected consumer spending.

“These are headwinds that potentially mean that growth in electricity may decelerate. These will impact not only demand for electricity but also demand for products and services,” Reyes noted.