Meralco earnings up in H1 as power demand rebounds

BY LENIE LECTURA – JULY 26, 2021
from Business Mirror

IMPROVING demand for power has allowed Manila Electric Co. (Meralco) to post a net income of P9.9 billion and a core profit of P11.4 billion in the first half.

In the same period a year ago, Meralco’s net income stood at P6.8 billion while core profit was at P10.6 billion.

Meralco’s 8-percent increase in core profit was on account of higher volume and contribution from San Buenaventura Power Limited (SBPL), the joint venture between Meralco’s power generation arm—Meralco PowerGen—and Thailand’s EGCO group.

The company’s net income improved due to the impairment of an equity investment in the first quarter of 2020.

Revenues for the first six months of the year stood at P149.1 billion, almost 8 percent higher than a year ago. Consolidated distribution revenue, which represented 22 percent of total electricity revenues, grew by 7 percent to P31.5 billion, consistent with the increase in volume.

Consolidated energy sales volumes, which include 270 gigawatt hours (GWh) of energy distributed by Clark Electric Distribution Corp., were at 22,663 GWh, 7 percent higher than 2020. The increase in consolidated volumes of 7 percent in 2021 was a complete reversal of the 7-percent decline in 2020.

Meralco said the growing consumer confidence due to the gradual increase in the number of people vaccinated resulted in the uptick in business activities and foot traffic in malls, restaurants, hotels and other retail outlets. Food and beverage commissaries also resumed operations. The second quarter also saw increasing onsite work activities, which contributed to the rise in commercial sales volumes.

“The arrival and dispensation of vaccines should pave the way for a gradual opening of the economy. It is my ardent hope that we carry on with fortitude until we win the battle,” said Meralco Chairman Manuel V. Pangilinan.

The Delta variant of Covid-19, Pangilinan said, makes it difficult to foresee how electricity demand for the rest of the year would be affected should government expand the quarantine restrictions.

“We are concerned about the Delta variant…That will play an important factor. When we announce our third quarter results we will have a better view,” he said.

However, Pangilinan is certain that Meralco’s 2021 financial performance will be better than last year. “Despite the challenges we face today, we are also mindful of our responsibility to our shareholders and to future generations as we pursue operational excellence and heighten sustainability initiatives.”

Meralco’s consolidated capital expenditures amounted to P3.1 billion in the January-to-June period.

The board has approved the declaration of an interim cash dividend amounting to P5.057 per share to all shareholders of record as of August 23, payable on September 15. This represents 50 percent of core earnings per share.