Meralco poised to hit ‘historic’ full-year profit

By Danessa Rivera – October 30, 2018 – 12:00am
from The Philippine Star

MANILA, Philippines — The seasonally higher demand in the fourth quarter would propel Manila Electric Co.’s full-year profit to hit “historic” figures, Meralco chairman Manuel V. Pangilinan said yesterday.

Meralco is poised to surpass its 2017 net income as the performance in the nine months ending September is “looking good,” Pangilinan said in a media briefing.

“It’s looking good based on nine-month results. Full-year will be a historic number for Meralco,” he said.

As of end-September, Meralco posted a nine percent rise in core net income from P15.4 billion last year to P16.7 billion this year, while net income jumped 14 percent from P15.9 billion to P18.2 billion.

Total revenues rose six percent from P214.4 billion to P227.4 billion, still largely driven by energy sales of its distribution business.

Meralco registered a 4.8 percent increase in energy sales to 32,921 gigawatt-hours (GWh) and customer count expanded by 4.7 percent to 6.54 million.

“The major driver of growth for Meralco continues to be our core distribution business, with volumes from real estate-related businesses, including Philippine Online Gaming Operators (POGOs), having provided the uplift for the commercial sector,” he said.

On a quarter-on-quarter basis, Meralco’s sales growth slowed down in the third quarter from the second quarter due to macro-economic factors and weather disturbances, which dampened residential sales growth in the past quarter. The residential segment accounts for 92 percent of the total franchise.

Slower sales growth translated to a slight decline in revenues from P79.7 billion in the second quarter to P76.9 billion in the third quarter.

Meanwhile, core net income amounted to P5.8 billion in the third quarter, slightly lower than the P5.9 billion in the previous quarter.

“Our growth this year could have been higher if not for the inflation and weather disturbances,” Meralco president Oscar Reyes said.

For the rest of the year, Meralco is expected to exceed last year’s income numbers as the fourth quarter started strong, particularly in the residential sector.

“We have seen a positive increase in October, residential seems to be growing at five percent in October alone. We hope the trend continues for the rest of the year,” Meralco senior vice president Alfredo Panlilio said.

With the five percent jump in sales in October, Meralco is expected to post favorable 2018 results, Pangilinan said.

“We’re trending toward a little higher than last year. The October sales went up five percent, so that will be higher than the third quarter growth. We’re also entering the Christmas season, so fourth quarter will probably be higher than the third quarter,” he said.

Meralco’s consolidated energy sales volume expanded by five percent to 42,102 GWh in 2017, which pushed core net income higher by three percent to P20.2 billion and net income by six percent to P20.4 billion.