Meralco 9-mth core net income up 11%


DISTRIBUTION giant Manila Electric Co. (Meralco) is confident it can reach its consolidated core net income guidance of P18.5 billion for 2015 after registering an 11-percent growth year of September.

“Given our performance to-date and the outlook for the rest of the year, we expect to achieve our consolidated core net income guidance of P18.5 billion for the full year 2015,” Meralco Chairman Manuel Pangilinan told reporters in a briefing on Monday.

At the same briefing, Meralco President and Chief Executive Officer Oscar Reyes said the company’s unaudited consolidated core net income, which excludes one-time and exceptional charges in the first nine months, was pegged at P15.8 billion.

Meralco’s consolidated revenues decreased by 3 percent to P197 billion from P202 billion a year earlier. Electricity sales accounted for 97 percent of consolidated revenues.

This was due to the combined effects of lower average distribution tariff and net lower pass-through generation and other charges, lower fuel prices, power supply agreements and loss of contestable supply revenues to other retail electricity suppliers.

Meralco’s total volume of distributed electricity grew by almost 5 percent, primarily driven by strong demand from all customer classes on account of new customer connections, particularly residential and commercial, increased economic activities, and benign inflation.

The company’s customer base grew by 209,000 to 5.7 million, reflecting an increase of almost 4 percent year-on-year.

The lower interim average rate implemented at the start of the 4th Regulatory Period on July 1, 2015 resulted in a lower average distribution rate of P1.52 per kilowatt hour (kWh) for the nine months to September 30, 2015, compared with P1.63 per kWh a year earlier.
Its non-electricity revenues, which accounted for 3 percent of consolidated revenues, increased by 44 percent.

Betty Siy-Yap, Meralco senior vice president and chief finance officer, said the consolidated core EBITDA (earnings before interest, tax, depreciation and amortization) was higher at P27.1 billion, reflecting a core EBITDA margin of 14 percent on consolidated revenues.

She said the consolidated capital expenditures amounted to P7.8 billion in the first nine months of 2015, with electric capital projects accounting for practically of Meralco’s capital expenditures.

The company’s consolidated gross debt balance was P29.9 billion as of September 30, 2015, including P2.5 billion of debts maturing within one year.

“Total notes payable and long-term debt and financing costs paid during the nine months ended September 30, 2015 amounted to P1.6 billion. All of Meralco’s debts are denominated in Philippine pesos, with no significant maturities until 2020. Financing costs totaled P0.9 billion,” said Sy.

The 12-month moving average system loss continues to reflect sustained improvements over the same period in 2014.

At 6.56 percent, it is 0.11 percentage point lower year-on-year. Cumulative savings to customers resulting from lower system loss amounted to around P17.0 billion.

Its year-to-date net system input was 29,533 gigawatt, up 5 percent, or about the same pace as energy its sales growth, consistently maintaining the system loss at well below the regulatory cap.

Meralco’s peak demand in the year-to-date was 6,298 MW, up 3 percent on-year and higher than Luzon’s peak demand by 0.5 percentage point. This is reflects the pace of economic activities within the company’s franchise area.


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