Power retailer Manila Electric Co. said consolidated core income grew 3 percent in 2017 to P20.2 billion from P19.583 billion in 2016 on higher electricity sales amid increased demand.
Meralco chief financial officer Betty Siy-Yap attributed the higher core income in 2017 to a “5-percent increase in energy distributed, higher financing income from funds deployed due to improved yields and the adjustment of provisions following the continuing resolution of legacy fiscal matters.”
Siy-Yap said the strong performance of Clark Electric Distribution Corp., a 65-percent subsidiary of Meralco, contributed close to P140 million in core net income.
Meralco said non-electric subsidiaries such as CIS Bayad Center Inc. and Radius Telecoms Inc. also provided “meaningful additions” to the core income of the company with income contribution of P260 million and P394 million, respectively.
Meralco’s consolidated reported net income reached P20.384 billion last year, up 6 percent from P19.176 billion in 2016. Reported net income is adjusted to exclude the effects of exchange gains or losses, impairment charges, mark-to-market adjustments, one-time and exceptional transactions, among others.
Meralco’s core income in the fourth quarter alone reached P4.843 billion in 2017, up 5 percent rom P4.617 billion in 2016 while reported net income went up 27 percent to P4.456 billion from P3.5 billion.
Sales volumes grew 5 percent in 2017 to 42,102 gigawatt-hours, on the back of a growing customer base, positive economic conditions , softening of the peso, stable power supply and low power plant outages.
Commercial sales volumes accounted for 39 percent of total sales driven by real estate, hotels and restaurants and retail trade demand.
Residential volumes accounted for 31 percent of total sales amid stronger consumer confidence and spending while industrial sales represented 29 percent of total sales with demand coming from semiconductor, food and beverage and basic metals industries.
Meralco’s sales volume is seen to grow 5.5 percent in the first quarter this year, driven by an average 5-percent sales growth in the first two months.
“Electricity growth continues to be a barometer of the economy’s expansion. In 2017, consumption on the demand side, and services on the supply side, remained to be the mainstay of the economy, contributing to the 6.7 percent GDP [gross domestic product] growth,” Meralco chairman Manuel Pangilinan said.
Gross revenues grew 10 percent last year to P282.6 billion from P257.2 billion in 2016 as a result of higher volume and pass-through generation charges resulting from rising fuel prices and depreciation of the peso.
Meralco ended 2017 with a total of 6.3 million customer accounts, up 5 percent from six million at end of 2016.
“We are well positioned to support and enable the government’s ‘Build, Build, Build’ anchor economic program, in addition to government’s anticipated approval of unsolicited proposals covering rehabilitation, maintenance and operations of the country’s infrastructure facilities such as major airports, light and heavy rail. These government-led, private sector-driven investments will fuel consumption spending and further propel the country towards a higher economic growth trajectory in 2018 and beyond,” said Pangilinan.
Meralco president Oscar Reyes said he was hopeful that the Energy Regulatory Commission would act on the company’s pending power supply agreements.
“These PSAs are required to be in place by their target commercial operations date to ensure adequate, efficient and reliable power supply and to thereby avert the risk of power outages that will be damaging to the economy, businesses and industries and households,” Reyes said.
He said the approval of the PSAs was needed with urgency amid the increase in engineering, procurement and construction costs and financing costs of the new plants.