‘Manufacturing resurgence to boost Meralco profits’

BY LENIE LECTURA – JULY 5, 2021
from Business Mirror

The Manila Electric Co. (Meralco) expects “better” profits for 2021 compared to last year due to improving electricity sales.

“I think our volumes will be higher this year and I think profits will be better than 2020,” Meralco Chairman Manuel V. Pangilinan said over the weekend.

In 2020, Meralco’s reported net income fell by 30 percent to P16.32 billion while core profit was down by 9 percent to P21.71 billion. Revenues and volume also dropped last year due to reduced purchased power costs.

Pangilinan is confident that the 2021 figures would be “surely better than 2020.” He said Meralco continues to record an “uptick in the volume,” particularly in the manufacturing sector as most businesses have resumed operations.

“I was actually happy to read the news that 400,000 people got re-employed. At Meralco, we see an uptick in the volume that we are selling. Of course residential continues to increase while manufacturing is starting to get back on its feet. We are seeing that in the volume of manufacturing,” he said.

Meralco’s residential segment continues to post strong numbers as the lockdown restrictions brought about the rise of work-from-home arrangements, online distance learning and limited movement.

The commercial sector, which used to account for 40 percent of Meralco’s sales, has yet to recover. Before the pandemic, commercial volume accounted for the biggest share at 40 percent.

“That is why we need to continue opening up the economy. Anywhere we can help the government, helps the business sector,” he added. Over the weekend, the MVP Group of Companies commenced the vaccination program for its 60,000 employees.

Also, election spending is expected to boost Meralco’s revenue. “Yes, because you will put more money into the income stream of people. So, better than before.”

At end-March, Meralco registered 7.2 million customers.

The company posted P4.3 billion in net income for the first quarter, up by 66 percent from the same period a year ago, mainly due to foreign exchange gain, re-evaluation of Meralco’s investment in Global Business Power Corp. (GBPC) and non-core expense adjustment.

Meralco’s power generation arm, Meralco PowerGen Corp., completed last March 31 the acquisition of the 86 percent combined equity in GBPC from Metro Pacific Investments Corporation and JG Summit Holdings, Inc.  Core profit, however, fell 11 percent to P5.1 billion due to lower revenues as energy sales volume shrunk by 4 percent to 10,473 gigawatt hours (GWh) because demand was affected by the pandemic.