Manila Electric Co., the biggest retailer of electricity, expects full-year sales growth of 4.5 percent to 5 percent and a net income “slightly better” than in 2017, its top official said over the weekend.
“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 gigawatthours last year, up five percent from 2016.
Meralco posted a consolidated core income of P20.2 billion in 2017, up 3 percent from P19.583 billion in 2016. Meralco’s consolidated reported net income reached P20.384 billion last year, up 6 percent from P19.176 billion in 2016.
“Compared to 2017, I think because of this volume growth, we expect slightly better bottom line. I think we have to recognize that there are a number of developments that are happening,” Reyes said.
He cited factors that affected demand, including 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, adding that “even if it means lower volume for us.”
“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.
“First is temperature, number two, inflation was low, exchange rates are low. There was lot of liquidity but now, interest rates, exchange rates and inflation rate are higher. Those will impact not only demand for electricity but also demand for products and services,” he said.