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Meralco’s core income fell 9% to P21.7 billion in 2020

Electricity retailer Manila Electric Co. said Monday consolidated core net income declined 9 percent in 2020 to P21.7 billion year from P23.8 billion in 2019 following a 7-percent drop in sales amid the impact of the coronavirus pandemic.

“Overall in 2020, the lower CCNI was mainly because of the 7-percent decline [in sales] which was due to the combined effects of the Taal Volcano eruption, COVID-19 and the three major weather disturbances that hit the franchise area,” Meralco chief finance officer Betty Siy-Yap said.

Meralco’s reported net income, adjusted to exclude the effect of foreign exchange gains or losses, impairment charges, mark-to-market adjustments, and other one-time and exceptional transactions, also dropped 30 percent to P16.328 billion from P23.285 billion.

Energy sales fell 7 percent last year as the economy shrank 9.5 percent.

Meralco said consolidated energy sales volumes, which included volumes distributed by Clark Electric Distribution Corp., reached 43,572 gigawatt-hours, down 7 percent from the 2019 volume.

It said residential volumes accounted for 38 percent of total sales, commercial, 34 percent; and industrial, 28 percent. These were different from the pre-pandemic share of 30 percent, 40 percent and 30 percent, respectively.

The decline in energy sales volume was exacerbated by three typhoons, which ravaged the Meralco franchise area last year.

Meralco chairman Manuel Pangilinan said he was encouraged by the consumption trends starting January 2021.

“We are committed to enabling the re-opening of the economy which we hope happens this year. We are encouraged by Meralco’s January 2021 operating trends, including energy sold to commercial customers starting to regain traction,” Pangilinan said.

Pangilinan said Meralco joined the government in containing the outbreak of COVID-19 by ensuring that its 5,700 workforce were regularly tested, supplied with the necessary personal protective equipment, provided supplements to boost their immunity, and given prompt medical attention at the first sign of symptoms or infection.

“I am of the view that we need to jumpstart the economy sooner rather than later. The planned nationwide rollout of the COVID-19 vaccines is the first and most critical step towards alleviating fear, which is a prime deterrent to mobility. To this end, we have joined others in the private sector in procuring vaccines not only for Meralco, but also for the broader MVP Group,” Pangilinan said.

He said Meralco had not lost sight of its role in providing reliable power to customers which would also underpin the economic recovery.

“In addition, we are cognizant of the need to future-proof our business by focusing on sustainability, and by digitalizing certain of our processes. We are increasing resources allocated to clean technologies across all businesses, instituting a stronger plan for the reduction of greenhouse gas emissions and setting up science-based, measurable targets as our guidance,” Pangilinan said.

Meralco’s sales volumes skewed toward the residential sector during the pandemic as the lockdown and quarantine restrictions necessitated work-from-home arrangements, online distance learning and limited mobility.

Commercial volumes dropped 20 percent in 2020 compared with 2019, with hotels and retail trade the hardest hit as foot traffic to malls, hotels and other retail establishments drastically declined.

Industrial volumes inched up gradually by the end of 2020 as manufacturers started to operate. For the first time since March last, industrial volumes reflected positive 4-percent growth in December.

The semiconductor and non-metallic industries provided the increase to the volumes and took the share in sales from the food and beverage, and packaging industries.

Gross revenues in 2020 reached P275.3 billion, or 14 percent lower than in 2019 while volume dropped 7 percent to 43,572 GWh.

Total electricity revenues amounted to P267.9 billion, down 14 percent from a year earlier, reflecting the reduction in Meralco’s purchased power costs.

Meralco’s customer base grew 4 percent, ending the year with 7.1 million customer accounts, for a net 249,000 new customer accounts.

Topics: Manila Electric Co. , net income , coronavirus pandemic , Betty Siy-Yap
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