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Meralco posts P11.7B net income in H1

Rappler.com

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Meralco posts P11.7B net income in H1
The utility firm sets a profit guidance of P18.5B in 2015, but the second half of the year will have its challenges, says Meralco chairman Manny Pangilinan


MANILA, Philippines –  The Manila Electric Company (Meralco) reported a net income of P11.7 billion ($257.09 million) for the first half of 2015, as it sets its sights on a core profit of P18.5 billion ($406.55 million) for the year.                                                             
The reported net income for the first semester of the year was 22% higher than in the first half of 2014.
The profit guidance means the utility firm would have to report a consolidated core net income of P6.9 billion ($151.64 million) from July to December to meet its 2015 target.
“Full–year results are guided at P18.5 billion ($406.55 million) for 2015 compared to last year’s core profit of P18.1 billion ($397.78 million),” said Meralco Chairman Manuel V. Pangilinan during a news conference of the utility firm’s first half financial and operating results on July 27.
Meralco posted P11.6 billion ($254.93 million) in core income as of end-June this year, 18%higher than in the same period a year ago. 
Meralco’s revenues hit P134 billion ($2.95 bilion), 1% higher year-on-year. 
For the period ending June, the volume of energy sold stood at 17,753 gigawatt hours (GWh), 3% higher than the volume sold for the same period in 2014, with record sales of 3,441 GWh in June 2015.
Commercial volume accounted for 39% of the total volume sold. Residential and industrial volume each provided 30% of the total volume for the first half of 2015. 

Meralco customers at end-June stood at 5.68 million. Total capital expenditures (capex) for the first 6 months amounted to P5.8 billion ($127.56 million). 

Challenges in H2 
 
While it set its profit at P18.5 billion, as buoyed by an all-time high sales growth and customer base expansion to 5.683 million subscribers in the first half of 2015, Pangilinan, howeve,r said the remaining of the year poses leaner financial income for Meralco.

Challenges in the second half of 2015 include a reduced distribution tariff from the last implemented rate in the third regulatory period of P1.5562 ($0.034) per kilowatt hour (kWh) to an interim average of P1.3810 ($0.03) per kWh; scheduled plant maintenance shutdown; and higher expenses for project development costs of its subsidiaries.

Pangilinan added that the approved interim rate will have a P2.2-billion ($48.38 million) effect on Meralco’s bottomline. 
 
Thus, Pangilinan said Meralco needs to be ahead of the curve by anticipating its customers’ needs. 

“We‘ll continue to invest heavily. Capital expenditures for smartgrid, prepaid electricity, e-vehicles, distributed generation, and renewables will increasingly feature in our investment program,” said Meralco president Oscar Reyes. 
 
Meralco’s board of directors also approved the declaration of cash dividend of P6.76 ($0.15) a share. 

On top of the regular dividend representing 50% of the 2015 interim earnings, Meralco is paying an additional 10% special dividend out of the 2014 consolidated core ent earnings, bringing payout for 2014 to 90%. – Rappler.com

$1 = P45.49

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