Power retailer Manila Electric Co. expects core income to reach “north of P30 billion” this year, exceeding last year’s P27.1 billion, on the back of strong financial performance in the first half, a top executive said Monday.
Meralco’s consolidated reported net income also climbed 36 percent to P17.9 billion in the first six months from P13.1 billion in the same period last year.
The board approved interim cash dividends of P8.520 per share payable to all shareholders of record as of Aug. 30, 2023 following the release of the financial results. The dividend payout represented 50 percent of core earnings per share.
“Considering Meralco’s operational and financial performance in the first half of the year, it is reasonable for Meralco to show record sales and earnings for the full year 2023,” Meralco chairman and chief executive Manuel Pangilinan said.
He said the first-half results provided the basis for assuming that the full-year results would be another record high and “may be north of P30 billion.”
Consolidated core net income in the first six months reached P19.2 billion, or 47 percent higher than P13.1 billion in the same period last year, led by the 186-percent increase in contribution of the power generation business.
The power generation segment contributed P6.6 billion or 34 percent of the CCNI, buoyed by higher earnings of PacificLight Power Pte. Ltd. in Singapore and the turnaround of Global Business Power Corp.
Consolidated distribution utility energy sales volumes in the first half rose 3 percent to 24,792 gigawatt-hours from 23,968 GWh, as volumes of Meralco and Clark Electric Distribution Corp. increased 3 percent and 7 percent, respectively.
“Beyond the core distribution business, we have always considered the expansion of our power and non-power subsidiaries as important growth pillars for Meralco. We expect a significant boost to our bottom line this year from the power generation business in particular, which will also drive Meralco’s growth moving forward, especially as we pursue larger generation projects that will help meet the country’s growing demand for power and decarbonization goals, ”Pangilinan said.
Consolidated revenues went up by 13 percent to P224.8 billion from P199.6 billion on to higher fuel prices on pass-through charges and energy fee of the non-renewable power generation plants; depreciation of the peso against the US dollar which averaged at 55.233 during the six-month period; increase in spot prices and energy purchases from the Wholesale Electricity Spot Market and combined impact of the 3 percent growth in volumes distributed; and slightly higher average distribution rate with the completion of the refund in November last year.
“Our record-high sales volumes reflect strong rebound in terms of power demand. As we expect this growth trajectory to continue, we will aggressively invest in distribution network upgrades and expansion, and implement more programs that will improve overall customer experience,” Meralco executive vice president and chief operating officer Ronnie Aperocho said.
“When it comes to power rates, we have seen the generation charge decrease for two consecutive months and still expect lower crude prices in the world market to help pull down power costs this coming August. However, we are cautious about the possible impact of El Niño on the power sector. We will work closely with the industry as we also seek ways to mitigate any adverse impact on our rates and continuously ensure sufficient supply to our over 7.7 million customers,” Aperocho said.
Demand in the Meralco franchise area peaked at 8,438 megawatts on May 9, up by 4 percent compared to the peak demand of 8,111 MW in the first half of 2022.
Meralco said the higher temperature and humidity during the dry season drove the increase in demand for electricity from the residential segment, while the continuing recovery and growth in the economy bolstered commercial segment sales.
Sales mix also continued to shift towards pre-pandemic levels, with commercial segment accounting for a bigger 37 percent share from 35 percent in 2022.
The share of residential was the same at 35 percent, while industrial share slipped to 28 percent from 30 percent.
Consolidated customer count increased 3 percent to 7.716 million from 7.519 million a year ago, with the continuous energization of new customers from both ordinary service and project-covered applications.
