Meralco net income in first quarter up 7% to P5.67 billion

The Manila Electric Co. (Meralco) posted a 7-percent increase in net income for the first three months of the year to P5.67 billion, from P5.31 billion in the same period last year.

Core profit at end-March this year stood at P5.6 billion, 14 percent higher than in the same period last year. Revenues were up by 7 percent to P73.63 billion at end-March this year.

While Meralco’s customer base continues to grow, electricity sales volume grew by only 2 percent to 10,381 gigawatt hours (GWh) at end-March. In the same period last year, electricity sales volume grew by 8.9 percent over 2017.

This is mainly attributable to the “high base effect” of the volume attained in 2018 and the slightly cooler average temperature throughout the quarter.

“There was a mild growth in sales against a very high base in 2018.  We are still fortunate to have very favorable financial results. Strong sales in the industrial class of market grew by 4.4 percent in the first quarter; commercial was up 2.2 percent; and residential hardly grew at 0.4 percent, which sort of depressed our first-quarter sales,” Meralco President Oscar Reyes said.

The company said the lower-than-expected sales growth during the first quarter, particularly in the residential and commercial sectors, were attributable to concerns on higher interest rates, the weakening of the peso against the US dollar, and their impact on fuel and commodity prices, exacerbated by the recent red and yellow alerts caused by the coincident forced outages of several plants.

Meralco sales growth in April, when most yellow and red alerts occurred, is a “precursor” of how demand for power will behave for the second quarter.

“I hate to say it, but second-quarter volume numbers would be good,” Meralco Chairman Manuel Pangilinan said.

The company is expected to register a sales growth of 6 percent in April.

“April seems to be stronger. It’s very warm temperature so we see a bump in residential sales in April,” Meralco Senior Vice President Alfredo Panlilio said.

Meralco’s customer base grew by over 4 percent to 6.7 million customer accounts, with 285,000 net new accounts since March 2018. The residential customer base, which rose by close to 5 percent, remains at 92 percent of the total customer base. This includes 102,656 prepaid electricity customers, up from 93,522 as of end-March.

Commercial, which represents 8 percent of the total customer count, and industrial, which accounts for less than 1 percent of the total, customer accounts increased by 3 percent and 2 percent, respectively, the same rates of increase in the comparative period in 2018.

Company costs and expenses during the period grew by 7 percent to P68.52 billion.