Manila Electric Co. (Meralco), the country’s largest power distributor, reported its net income for the first half of 2016 declined 8 percent year-on-year, falling to P10.8 billion from P11.7 billion in first half of 2015.
The company’s consolidated revenue also declined, slipping 4 percent in the six months ending June 30 to P128.8 billion from P134 billion in the same period a year earlier.
The drop in revenue and income was despite an increase in consolidated energy sales volume, which grew by 11 percent or 19,717 gigawatt-hours (GWh) compared with 17,753 GWh in the same period last year.
The company did not discuss the revenue or profit decline in detail, but noted that Meralco reduced its average interim distribution tariff beginning July 1, 2015 following the completion of its 3rd Regulatory Period on June 30, 2015, which resulted in a lower average distribution rate of P1.44 per kWh for January to June 2016 compared with P1.59 per kWh for the same period in 2015.
In addition, the generation charge billed to customers averaged P3.87 per kWh, or 20 percent lower than P4.93 per kWh in 2015, and transmission charges were at P0.90 per kWh or 4 percent lower, although these are pass-through charges not reflected in Meralco’s bottom line.
Focusing on positive indicators, Meralco President Oscar Reyes noted that June saw record peak electric demand of 6,748 megawatts (MW).
“The highest-ever single-month consolidated sales volume was recorded in June 2016 at 3,637 GWh. Year-to-date double digit growth sales volumes for 2016 was sustained, even with moderate 6 percent growth for the month of June 2016,” he said during the media briefing.
“Increasing economic activities and continued migration to urban centers have resulted in customer count and increasing number of air-conditioning, refrigeration units installed and usage of electronic devices account of volume growth,” Reyes said.
The number of Meralco customers increased 4 percent to 5.9 million by end-June 2016, as new connections across all customer classes increased by over 226,000 year-on-year.
In first half of 2016, total net new connections was at 125,000, reflecting an average of almost 21,000 new customers per month. At this pace, the number of customers is expected to breach the 6 million mark by the end of 2016.
Residential sales volumes grew strongest at 6,173 GWh in H1 2016, 17 percent higher than the same period last year driven largely by growth in customer base, warmer temperatures, lower inflation, and lower electricity retail rates, Reyes said.
Commercial volume grew by 11 percent and accounted for 39 percent of total sales, driven by the real estate, retail trade, hotel, entertainment, and service industries.
Industrial volume grew by 6 percent, with its contribution to total sales volumes steady at 29 percent as increased demand came from the food and beverage and metallic and non-metallic industries.