POWER distributor Manila Electric Co. (Meralco) said its consolidated net income grew 5 percent in 2014 to P18.1 billion from P17.27 billion in 2013 on higher electricity sales and a wider customer base as well as improved contributions from its subsidiaries and affiliates.
The country’s largest power utility said consolidated core net income for 2014 rose to P18.2 billion from P17 billion in 2013.
Meralco president and chief executive officer Oscar S. Reyes said earnings growth also came from operational excellence and higher productivity.
Meralco’s electricity volume for last year reached 35,160 gigawatt-hours (GWh), up 3.0 percent over 2013 primarily due to the combined commercial and industrial volumes of Meralco and Clark Electric Development Distribution Corp. (CEDDC).
“The country’s robust growth has provided a solid foundation for the expansion of Meralco’s residential, commercial and industrial customer base and electricity sales,” said Reyes.
Meralco said its customer base increased by over 200,000 or 4.0 percent to 5.6 million at the end of 2014.
Betty Siy-Yap, Meralco senior vice president and chief financial officer, said the Board of Directors approved on Monday a final cash dividend of P8.49 per share to all shareholders of record as of March 23, payable on April 15, 2015.
Meralco chairman Manuel Pangilinan said the outlook for sustained healthy growth of the economy remains positive.
“Growing foreign exchange inflows from overseas Filipinos and from business processing outsourcing services continue to fuel strong domestic consumption,” said Pangilinan.
Although lower by P33.1 billion or 11 percent year-on-year, electricity revenues of P261.7 billion in 2014 remains the largest component of consolidated revenues, accounting for 98 percent, the utility said.
Reyes said the lower consolidated electricity revenues in 2014 could be attributed to the loss of the pass-through supply revenue component on electricity of contestable customers who switched their sourcing of power to other retail electricity suppliers under the Retail Competition and Open Access (ROCA).
He said another factor was the P9.3 billion decrease in 2014 in the Wholesale Electricity Spot Market (WESM) bill for December 2013 supply volumes as a result of a directive from the Energy Regulatory Commission (ERC) to recalculate WESM prices.
The 2014 consolidated core net income includes the contribution from Meralco’s engagement as technical partner with the Integrated Electricity and Distribution Marketing of Nigeria and providing management and technical services to two distribution utilities.
Meralco also reported that its consolidated capital expenditures (capex) in 2014 totaled P12.4 billion.
The company’s cash flow from operations for 2014 reached P37.2 billion. Free cash as at the end of 2014 amounted to P27 billion, net of shareholder-funded investments in associates of P769 million.
Reyes said that in June 2014, the firm prepaid the last tranche of its fixed-rate long-term debt totaling P4.9 billion to reduce interest expense.
Total interest bearing debt stood at P30 billion at the end of 2014, of which P2.3 billion is due within one year. Total debt incurred by Meralco’s subsidiaries was P530.2 million.