Manila Electric Co. (Meralco) posted a 15-percent increase in its consolidated core net income (CCNI) in the first six months to P13.1 billion from P11.4 billion in the same period last year on the back of strong energy sales and earnings from the power generation business.
Consolidated reported net income improved 32 percent to P13.1 billion from P9.9 billion with the adjustments made last year due to the passing into law of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act and recognition of foreign exchange gains this year against losses in 2021.
“We remain optimistic that Meralco will be able to sustain its financial performance throughout 2022 and deliver our commitment to our customers and shareholders as we pursue investments aimed at further improving our distribution infrastructure and services, building new power capacities to improve aggregate power supply—all to ensure the country’s long-term energy security,” said Meralco chairman Manuel Pangilinan.
“While uncertainties and risks remain, we expect that our country will raise the pace of economic recovery under the new government… Meralco will be ready to support the growing power requirements of our customers and the government’s ramped-up infrastructure projects and initiatives to help our nation weather the lingering impacts of the pandemic and push forward,” he said.
Meralco’s consolidated revenues rose 34 percent to P199.6 billion from P149.1 billion, mainly due to the higher pass-through generation and other charges on account of persisting increase in global fuel prices, as well as the revenue contribution of the power generation business at P13.6 billion.
“Despite the brief slowdown due to the Omicron surge early this year, the continued easing of restrictions that coincided with elections-related activities allowed us to surpass our pre-pandemic sales performance in the first half of this year,” said Meralco president and chief executive officer Ray Espinosa.
“However, we remain cautious about the effect of persisting increase in global fuel prices on our rates. To this end, Meralco relentlessly looks for ways to cushion the impact of external volatilities on our operations,” Espinosa said.
He said Meralco would move ahead with the execution of sourcing strategies that include its planned competitive selection process to ensure the availability of cost-competitive power for customers in the long term.
Consolidated energy sales volumes in the first half rose 6 percent to 23,968 gigawatt-hours (GWh) from 22,663 GWh year-on-year.
Monthly sales volumes as early as April breached the 4,000-GWh level and were sustained throughout the second quarter, leading to an all-time high of 4,464 GWh in June.
Meralco recorded a peak demand of 8,111 megawatts (MW) on May 13, four percent higher than 7,808 MW in 2021.
Residential sales volumes grew two percent to 8,506 GWh from 8,370 GWh.
Household demand was tempered by return-to-onsite work, higher vaccination levels that improved public confidence to travel, and increased prices of commodities, leading to controlled electricity consumption.
Strong recovery in the commercial segment pushed sales volumes to double-digit growth of 12 percent to 8,305 GWh from 7,440 GWh.
Retail, restaurants and hotels showed massive improvement as the government allowed establishments to operate at almost full capacity, and social gatherings like rallies and concerts to resume.
Year-to-date industrial sales volumes, meanwhile, increased modestly by four percent to 7,085 GWh from 6,781 GWh amid logistical concerns from a shortage of raw materials and high production costs.
Meralco’s average retail rate rose 18 percent to P9.33 per kWh from P7.92 per kWh during the period as generation charges, which accounted for about 62 percent of the total retail rate, went up 30 percent due to higher fuel costs, peso depreciation and higher spot market prices.
Transmission charges, comprising nine percent of the retail rate, climbed 14 percent, while subsidies and taxes, representing 11 percent of the retail rate, added12 percent.