The Market Monitor Minding the Nation's Business
Listed Manila Electric Co. (Meralco) said its core earnings reached P18.9 billion in 2015, up four percent from P18.1 billion in 2014.
Its non-electricity businesses performed better with an 88-percent increase in revenues amounting to P8.6 billion from P4.6 billion year-on- year.
However, its electricity revenues fell by 5 percent from P261.7 billion to P249.9 billion, compared with a year ago.
It was caused by the lower fuel prices, switching of its captive customers to the retail electricity suppliers (RES) and its lower distribution rate.
Amid the lower revenues, Meralco President and Chief Executive Officer Oscar Reyes explained in its financial and operating results briefing Friday that the company saw a 5.6 percent growth for energy sales. He noted it was caused by the warmer temperature, stable power supply, positive economic conditions and low inflation.
Energy sales went up to 37,124 gigawatthours (GWh) in 2015 from 35,160 GWh in 2014, mainly from a 6.1-percent increase for commercial consumption and a 7.3-percent hike from residential consumption.
On the other hand, Meralco’s industrial sales grew by 3.4 percent to 30.2 percent from 2014.
For 2015, the company sourced most of its capacity from independent power producers (IPPs) and power supply agreements (PSAs) at 94.2 percent, along with 5 percent obtained from the Wholesale Electricity Spot Market (WESM).
Its customers also increased from 5.57 million in 2014 to 5.78 million customers in 2015.
The distribution utility further reported its system loss decreased slightly from 6.49 percent in 2014 to 6.47 percent in 2015. Reyes noted the lower losses brought customer savings amounting to P4.5 billion.
Reyes noted the average power rate fell from P9.42 per kilowatthour (kWh) in 2014 to P8.26 per kWh in 2015.
However, the consolidated distribution rate lowered by 8 percent to P1.48 per kWh, compared to 2014.
Meralco Senior Vice President and Chief Finance Officer Betty Siy-Yap said the lower distribution charge for the full year resulted into revenues of P2.5 billion.
She also said the distribution utility expected revenues after tax amounted to P4.5-4.8 billion, based on the current 30,000 GWh consumption.
Yap also noted the distribution utility expects its subsidiaries to offset the lower revenues from the distribution rate reduction.
For this year, Meralco Chairman Manuel Pangilinan expects the company’s net income to be similar from last year at P18.9 billion.
”Even as we expect to remain in a regime of a slightly lower interim distribution tariff for most or all of 2016, we expect Meralco’s core earnings for the year to be broadly similar to the 2015 core income,” he said.