Meralco on track to hit P23-billion core income target for this year

MANILA Electric Co. (Meralco) expects to post a core net income of at least P23 billion for 2019 as the country’s largest distribution utility has managed to sustain its performance so far this year, company officials said.

“Quite likely the full-year profitability on a core basis of Meralco will be north of P23 billion,” said Manuel V. Pangilinan, the company’s chairman, during a media briefing on Monday to present the third-quarter operating and financial results.

“For the first nine months, the actual core was about P18.5 billion, so it is likely we will achieve the P23-billion-plus core net income for the full-year 2019,” he added.

During the third quarter, Meralco posted a core net income excluding one-off items of P6.14 billion, higher by 5% compared with the level in the same quarter last year. Including one-time gains, its reported net income reached P6.31 billion, up 1% from a year ago.

“The momentum gained in the first half of 2019 was sustained in the third quarter as shown by the 8% increase in sales volume resulting in consolidated growth over 6% for the nine-month period,” said Betty C. Siy-Yap, Meralco senior vice-president and chief finance officer, during the briefing.

As of September, Meralco’s core net income hit P18.45 billion, up 11%, while its reported net income was at P18.32 billion, higher by 1% compared with a year ago.

Revenues during the nine-month period rose by 6% to P241.13 billion. Electricity sales accounted for the bulk of revenues at P235.38 billion, or higher by 6% compared with the same period last year.

“Energy sales grew 6.3%, from the previous period last year, at 35,004 gigawatt-hours. Growth was driven by residential [customers], which grew at 8%, followed by commercial at 6% and growth by industrial at 5.1%,” said Ray C. Espinosa, Meralco president and chief executive officer, during the briefing.

He said the nine-month period’s sales performance came at a time of benign inflation, a more favorable interest rate environment, stable foreign remittances and a growing services sector.

Meralco’s customer count as of September grew by 4.2% to 6.82 million. Demand within its franchise area peaked at 7,740 megawatts, which was hit on June 4, and compares with Luzon’s overall peak demand of 11,344 MW on June 21.

In a press release issued during the briefing, Mr. Pangilinan was quoted as saying: “We anticipate sustained growth for Meralco resulting from the country’s continued overall economic expansion as well as growth that will follow the Government’s ongoing infrastructure development programs.”

He also said that the manageable inflation along with increased liquidity in the financial system provides opportunities for growth across all customer segments. He said there is no doubt of a “significant” domestic economic expansion with the foreseen improvement in government public investments in the coming months, and the inflow from remittance of overseas Filipino workers.

On Monday, shares in Meralco slipped by 0.11% to P355.80 each. — Victor V. Saulon