Alternative Investment Report

Meralco core income up nearly 30% to P6.7B

MANILA Electric Co. (Meralco) posted a core net income of P6.66 billion in the third quarter of 2021, up by 29.7% from a year ago, brought in part by higher energy sales with the easing of quarantine restrictions, the country’s largest power provider said on Monday.

Its reported net income, which excludes one-off items, also went up nearly 49% to P6.57 billion during the July-September quarter when it recorded higher contribution from subsidiaries and increased availability of its power generation unit.

For the nine months to September, Meralco’s core net income went up by 15% to P18.06 billion. Its reported net income also went up by 47% to P16.52 billion.

“Our financial results through September are encouraging, and there is indication that we will exceed the CCNI (consolidated core net income) achieved last year,” said Meralco Chairman Manuel V. Pangilinan in a media release on Monday.

He gave the same guidance during the company’s virtual briefing on the same day to present its quarterly financial performance.

The National Capital Region was downgraded to a modified enhanced community quarantine (MECQ) classification on Aug. 21 after it was placed on the stricter ECQ from Aug. 6 to 20.

In Sept. 16, the capital was placed under the more lose “alert level system,” specifically Alert Level 4.

A month later, it was placed under the lower alert level 3 allowing 30% indoor capacity and 50% outdoor capacity for establishments. Tourist attractions and recreational venues such as libraries, museums, amusement parks, swimming pools, movie theaters, and others were also allowed to operate.

The country’s Health Department on Thursday also said the capital may soon be downgraded to Alert Level 2 as coronavirus cases continue to decline.

As more establishments open, Meralco’s gross revenues for the January-September period increased by 11% to P231.71 billion from P208.79 billion the previous year. Its power distribution revenues rose 5% to P47.39 billion from P45.28 billion.

Meralco’s consolidated energy sales also grew 6% to 34,398 gigawatt-hours (GWh) from 32,539 GWh last year.

Residential households accounted for 37% or 12,746 GWh of the sales mix, while commercial and industrial establishments made up 33% or 11,281 GWh, and 30% or 10,263 GWh respectively.

Meanwhile, as of September 30, Meralco reported to have spent P18.52 billion on capital expenditures (capex) for 2021, which is 70% higher than P10.92 billion the previous year.

“Over the past months, Meralco had been called to provide continued quality service under unprecedented situations,” said Meralco President and Chief Executive Officer Ray C. Espinosa.

With the ongoing coronavirus pandemic, many Meralco customers are unable to pay their electricity bills which prompted the national government and Meralco to temporarily postpone disconnection activities in areas placed under enhanced community quarantine (ECQ), modified ECQ, and granular lockdowns.

Meralco also offered installment plans for those who cannot pay their bills in full. As of end-September, Meralco has P1.8-billion worth of accounts receivables under its installment arrangements.

The company said further that its target is to have 1,500 megawatts (MW) renewable energy capacity in the next five to seven years.

Projects related to this include the construction of solar power plants in Baras, Rizal (78 MWac); Cordon, Isabela (45 MWac); Nueva Ecija (19 MWac); and Ilocos Norte (50 MWac) this year.

For next year and beyond, the company aims to construct its first large-scale wind farm and to have solar and storage developments.

The company’s shares on Monday inched down by 0.41% or P1.20 to finish at P293.40 apiece.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., which has interest in BusinessWorldthrough the Philippine Star Group, which it controls. — Bianca Angelica D. Anago

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