Meralco 3Q profit up 5 percent to P13.6 billion

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A worker from the Manila Electric Co. does maintanance works on power lines located in Manila

The Manila Electric Co. (Meralco), the country’s largest power distributor, registered a thin improvement in its core net profit during the nine-month period ending September, on the back of volume of energy sold.

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In a briefing held on Friday, Meralco officials reported that its unaudited consolidated core net income, which excludes one-time, exceptional charges for the nine months ended September 30, 2013, amounted to P13.6 billion, up 5 percent from the same period last year.

Consolidated reported net income of the company also stood at P13.6 billion, which according to Meralco Chief Executive Officer Betty Siy-Yap, is stable year-on-year.

“Our net income level remains strong driven by core distribution, retail electricity supply and nonelectric income,” she said.

According to Yap, the volume of energy sold during the first nine months of 2013 reflected a 5-percent growth despite a major weather disturbance on August 19, 2013, which resulted in an estimated 17.9 gigawatt hours of unserved energy.

However, consolidated electricity revenues of the distributor hit P205.3 billion for the nine months of 2013, down by 4 percent year-on-year, while consolidated revenues itself, of which electricity sales account for 99 percent, decreased by 3 percent to P208.1 billion.

In a financial report presented by Yap, she explained that the decline in consolidated revenues was due to the significantly lower average price of purchased power under five new power sales agreements (PSAs) implemented shortly before the start of the current year. These PSAs accounted for approximately 55 percent of total purchased volume.

Consolidated capital expenditures for the period, on the other hand, ended September 30, 2013, also amounted to P6.1 billion.

“Sizeable capital expenditures year-after-year on the Meralco network and customer retail service infrastructure, and the commitment to public service of the people of Meralco, have again paid off in enabling us to sustain sales growth,” Oscar Reyes, Meralco president and chief executive officer, said.

Meralco also increased its capital expenditure for the year by more than a billion pesos, which was approved by the Energy Regulatory Commission. Overall, Meralco Chairman Manuel Pangilinan said given the company’s performance to-date and the positive outlook for the remainder of the year, it is likely that Meralco’s consolidated core net income for the full-year 2013 will exceed its earlier guidance of P17 billion.

“We remain positive about our distribution business and prospect of our power generation initiatives. The equity stakes we have taken in Global Business Power Corp. here and in PacificLight Power Pte. Ltd. in Singapore will provide us early income and cash flow accretion, even as we pursue new builds of baseload and mid-merit power plants in Luzon and other parts of the country,” Pangilinan said.

During the first half of the year, Meralco reported a consolidated reported net income of P9.4 billion, 3 percent lower than the same period of 2012.

According to Meralco, the reduction in its profit was largely brought about by a one-time gain from the sale of the company’s shares in Rockwell Land in 2012.

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