Meralco core income up by 10% to P27.105B in 2022

By Myrna M. Velasco – February 27, 2023, 5:06 PM
from Manila Bulletin

Buoyed by pandemic recovery-underpinned energy sales and its Singapore power asset, the consolidated core income of power utility giant Manila Electric Company (Meralco) climbed by 10-percent to P 27.105 billion in 2022 from P24.6 billion in the prior year.

For the company’s reported income, this was up by 21-percent to P28.431 billion last year from P23.5 billion in 2021, according to Meralco Chief Finance Officer Betty Siy-Yap.

She explained that the higher income of the company last year had been mainly traced to the improved performance of its power generating units – specifically the Pacific Light gas-fired electric generating facility in Singapore; as well as the income contribution of the San Buenaventura Power Ltd. (SBPL) coal-fired power plant in Quezon, its joint venture with EGCO of Thailand.

The upturn in core income, she noted, had resulted in core earnings per share of P24.05, which has been higher by10-percent; while reported earnings per share was up 21-percent to P25.23.

For Pacific Light, in particular, Yap said “the higher income was mainly due to margins from Singapore’s strong economic environment; while SBPL, on its ERC-approved rate with Meralco,” that is in reference to the pass-on generation charge that had to go through the approval of the Energy Regulatory Commission (ERC) before it can be reflected in the electric bills.

Yap further reported that revenues last year inched up by 34-percent to P426.5 billion from P318.5 billion in 2021, “mainly due to higher pass-through charges” as fuel prices had been hitting record high levels within the review period.

For this year, Meralco Chairman Manuel V. Pangilinan indicated that they are expecting continued financial performance improvement for the utility firm – and that will be primarily driven by energy sales.

“I think 2022 was a very good year for Meralco. Record high in revenues and billed volume as well. It was a good accounting for major portion of the national power system and power demand in the country,” he stressed.

Pangilinan added “we hope to improve on those profit, financial numbers this year but it’s too early to say to provide any guidance – but first month was quite good and certainly better than the last year’s first month.”

Meralco President and CEO Ray C. Espinosa conveyed “2022 was a year of recovery as we saw energy sales exceeding pre-pandemic levels,” adding that such was “reflective of the return of strong power demand across all customer segments after more than two (2) years of pandemic lockdowns.”

On an all-inclusive basis, the company reported jump in energy sales volume of 6.0-percent to 48,916 gigawatt-hours in 2022 versus 46,073 GWh compared to 2021. Meralco’s affiliate company even logged a heftier sales escalation of 16-percent last year.

Espinosa emphasized that the rise in the firm’s sales and profitability could be chiefly attributed to the company’s initiatives to “boost operational efficiency and ended the year with less and shorter service interruptions as well as improvements in system loss, which were achieved through our investments to strengthen our distribution network and through innovations that improve the service we deliver to our 7.6 million customers.”

Nevertheless, he narrated that despite Meralco’s income gaining traction,  “we faced headwinds such as the significant rise in fuel prices and the depreciation of the peso which weighed on our overall rates.”

On account of those economic parameters, Espinosa stated that the company will “remain cautious about the lingering effects of these challenges, alongside the anticipated tight supply condition in the coming dry months.”

And while Filipino consumers are getting perturbed with fears of probable service interruptions and rate spikes in the coming summer months, Espinosa assured that Meralco “will relentlessly work with the government and other industry players to help ensure availability of sufficient and reliable electricity supply while continuing to manage power rates.”