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By Euan Paulo C. Añonuevo Reporter
THE Philippines’ largest
electricity distributor said profits in the first quarter rose by
double-digits from last year on the back of lower expenses and
higher distribution revenues.
In a disclosure to the Philippine
Stock Exchange (PSE), Manila Electric Co. (Meralco) said it enjoyed
a 23.2 percent growth in net income to P655 million year-on-year.
Expenses went down by 9.8 percent
to P42.76 billion because of lower purchased power costs, which it
passes on to customers, and lower unrecoverable purchased power cost
or its system loss in excess of the cap set by regulators.
Distribution revenues inched up 2.7 percent to P5.80 billion.
The improvement in the
company’s bottom line came in the wake of a surge in customers’
electricity bills for March.
Based on actual billings for this
month, adjustments in the utility’s generation, distribution,
system loss and transmission charges resulted in a P0.9753 per
kilowatt-hour increase in rates.
A large chunk of the amount was
from increases in the company’s generation and distribution
charges, which rose by P0.5188 per kilowatt-hour and P0.3036 per
kilowatt-hour, respectively.
The Lopez-controlled distributor
said sales continued to register positive growth, increasing 1.9
percent to 6,156 gigawatt-hours in the first three months this year.
Meralco said that this was,
however, lower than last year’s 3.7 percent expansion mainly due
to the effect of the Lenten holidays which fell on March this year
as opposed to April last year.
The company said that its
commercial customers continued to lead sales growth, increasing 4.1
percent to 2,388 gigawatt-hours, propelled by the transport, storage
and communication, real estate and trade sectors.
Sales to industrial customers
grew 1.9 percent to 1,795 gigawatt-hours. The company said that
growth in this segment was led by beverage, transport equipment
manufacturing and basic metal sectors.
For the residential segment,
however, sales contracted 0.6 percent to 1,938 gigawatt-hours
because of lower temperatures for the period, and the fact that Holy
Week fell on March this year.
For that month alone, Meralco’s average retail rate stood at P7.51
per kilowatt hour, lower by P0.24 per kilowatt hour in the same
period last year.
Last year, its profit suffered a
steep drop as the utility stopped setting aside funds in case it
lost a case questioning a previous rate increase.
Meralco said it recorded a net
income of P3.61 billion, falling 73 percent from 2006.
Because of the lower profit, the
company’s basic earnings per share for 2007 decreased to P3.66
from P13.71 the year before.
The company blamed its earnings
decline on provisions for probable loses it had been allocating
after a case questioning a rate increase it implemented in 2003. The
Supreme Court resolved the case in December 2006 in the company’s
favor.
Meralco said that had there been
no provision made for losses amounting to P15.73 billion in 2006,
net income for that year would have been P3.16 billion. At that
level, last year’s profit would have been 14.2 percent higher.
Despite the profit dip, revenues
rose to P195.61 billion last year, a 5.1 percent jump year-on-year.
Likewise, distribution revenues
increased to P25.46 billion, up 9.2 percent from the previous year.
In terms of volumes, sales grew
4.6 percent to 26,219 gigawatt-hours across all its customer
segments.
Commercial establishments led the
company’s sales growth with a six percent increase in consumption
to 10,021 gigawatt-hours on the back of the booming domestic
property market.
Sales to industrial customers
rose by 4.2 percent to 7,405 gigawatt-hours from flat growth rate in
the past two years. The significant increase in electricity sales in
this sector was due to a rise in the construction industry’s
consumption, both in the private sector and the government.
Residential customers also bought
more from Meralco, with sales expanding 3.3 percent to 8,655
gigawatt-hours, a reversal of almost two years of decline.
The growth in residential sales
was due to a significant rise in per capita consumption of customers
in the AB and C brackets, which in turn resulted from the “low
inflation rate and stable electricity prices.”
Meralco’s shares closed lower
Monday at P78.50 from P81.00 previously.
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