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Meralco’s profit in 2018 topped ‘17 performance, says Pangilinan

The net profit of power retailer Manila Electric Co. in 2018 was likely higher than P20.3 billion in 2017, the company’s top executive said Monday.

“Quite well, the profits would be ahead of 2017,” Meralco chairman Manuel Pangilinan told reporters when asked about the company’s financial prospects.

Meralco posted a consolidated core income of P20.2 billion in 2017, up 3 percent from P19.583 billion in 2016. Consolidated reported net income reached P20.384 billion in 2017, also up 6 percent from P19.176 billion in 2016.

Pangilinan said prospects for 2019 would be even better. “We’re optimistic for this year. Generally speaking, prospects for the economy has improved with inflation down, higher income, the interest rates, increases in tenor, so we are optimistic about it. It has its effects in the stock market as well,” Pangilinan said, adding electricity demand was quite strong in January.

Meralco officials earlier predicted that full-year sales would grow 4.5 percent to 5 percent in 2018. 

“We’ll probably end this year at about 4.5 to 5 percent. I think we have to see what the final November and December figures, are but call it 4.5 to  5 percent growth from last year,” Meralco president Oscar Reyes said.

Meralco’s sales volume reached 42,102 gigawatt-hours in 2018, up five percent from 2016. Meralco currently has over six million customers in its franchise.

“Compared to 2017, I think because of this volume growth, we expect slightly better bottomline. I think we have to recognize that there are a number of developments that are happening,” Reyes said.

He said among the factors that affected demand were increased energy efficiency promotion and solar rooftop installation.

“Energy efficiency continues to grow because of available devices, because of technology. The elasticity of demand growth of electricity compared to growth of GDP [gross domestic product] keeps on declining. Before, it was 1.3 percent in the 1990s.  Now, we are doing about 0.75 percent growth in electricity for every 1 percent growth in GDP,” Reyes said.

Reyes said energy efficiency efforts helped consumers save on electricity bills “even if it means lower volume for us.”

“Whatever is good for consumers will be good for Meralco,” he said.

“Number two is increasing adoption of rooftop solar for residential, industrial. It means they will be getting less from the grid and effectively generating their own,” Reyes said.

“These are headwinds that potentially mean that growth in electricity may decelerate plus further adoption of battery and energy storage… Against that is how fast your demand for electric vehicles grow,” he said.

Reyes said Meralco also recognized that 2017 and 2018 were high base years so the company could not continue to grow at the same rate.

Meralco previously announced a 9-percent increase in core income in the first nine months to P16.69 billion from P15.37 billion in the same period last year driven by commercial and industrial sales growth.

Reported net income reached P18.212 billion in the nine-month period, up 14 percent from P15.928 billion in the same period in 2017. Reported net income excluded the effects of foreign exchange gains or losses, mark to market adjustments, gain on disposal of investment and other one-time exceptional transactions.

Topics: Manila Electric Co. , Manuel Pangilinan , Oscar Reyes , gross domestic product
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