The Manila Electric Co. (Meralco) is expecting core profit for the full year to drop 10 to 12 percent from the P23.8 billion posted in 2019, following a 14-percent decline in company’s first half earnings and 43-percent decline in reported net income. “While it is difficult to give a firm indication of 2020 performance, based on our outlook for the rest of the year, we expect our full year 2020 CCNI [consolidated core net income] to be in the area of P21 billion,” said Meralco Chairman Manuel V. Pangilinan in a statement Monday.
During a virtual press conference on the company’s first half financial performance, Pangilinan said Meralco’s earnings for 2020 “will be down by about 10 percent, no more than 12 percent, for the year versus 2019.”
“Compared to other corporates, we’re not as badly hit as other corporates.” While uncertainty remains as the effects of Covid-19 continue to impact the country, Pangilinan said Meralco moves with caution but remains positive that a recovery will happen soon.
He said Meralco’s first half results still provided “some encouragement” even as “profitability had to take a back seat.”
“Despite various challenges, including lower cash inflows, delayed capital expenditures, and the limitations resulting from the pandemic and lockdown, Meralco performed quite well.”
The utility firm posted a CCNI of P10.6 billion in January to June this year, from P12.3 billion in the same period a year ago. Reported net income was also down to P6.8 billion, from P12 billion, mainly due to losses incurred from its Singapore investment.
In the same period, revenues were down by 14 percent to P142.3 billion, from P165 billion on account of lower sales volume. Of which, electricity revenues stood at P138.63 billion at end-June this year from P161.27 billion in the same period last year, largely on account of lower volumes and pass-through charges.
Meralco sold 21,139 gigawatt hours (GWh) of electricity in the first six months of the year, 7 percent lower than in 2019.
Peak demand for the first half was 2 percent lower than 2019 at 7,614megawatts (MW), which was registered on March 10. During the lockdown, the highest registered demand was on June 23 at 7,080MW compared with 6,108MW on May 12.
The community quarantine impacted heavily on Meralco’s sales mix consumption shifted to higher loss-to-serve residential customers. At end-June, Meralco’s customer base grew to nearly seven million, with residential, commercial and industrial segments growing at 3 percent, 2 percent, and 1 percent, respectively.
“Covid-19 has disrupted and adversely affected industries, employment, operating procedures and our way of life. The pain brought about by the pandemic is expected to be felt for quite some time,” Meralco President Ray Espinosa said.
As such, Meralco has stepped up and increased its message handlers and, added digital and voice agents to address all customer concerns, while continuing to keep a robust and reliable network.
“We recognized the pain of our customers with the surge of consumption brought about by work-from-home arrangements and the scorching summer heat, and we have thus initiated ‘customer first’ measures. We have relaxed customer credit, while being mindful of our obligations to suppliers and stakeholders,” Espinosa added.
