MANILA, Philippines – Sluggish global oil and crude prices and a decline in retail revenues dragged Manila Electric Company's (Meralco) core net income in the first half of 2017 down to P10.1 billion.
The utility firm’s core profit reached P10.1 billion, 3% lower than P10.4 billion posted in the same period a year ago.
Reported net income at end-June this year was also lower at P10.5 billion, a reduction of 2% from January to June 2016 figures.
Revenues, however, stood 9% higher at P141 billion compared with P128.8 billion in the same period in 2016.
Meralco told the local bourse the drop in profit was due to lower global prices of coal and oil, a decline in contribution from non-electric subsidiaries, as well as a decline in overall retail revenues.
Meralco chief finance officer Betty Siy-Yap said core profit in the second quarter slightly dipped to P5.5 billion, partly because of delayed awarding of some projects
"One of the reasons was the contribution of Meralco subsidiaries because of a delay in the award of some of the project. With respect to retail income, competition has been more intense and prices have come down," said Yap.
Meralco chairman Manuel Pangilinan did not provide an outlook for Meralco’s full year performance. However, he said, it is possible that Meralco can duplicate its first half earnings in the second half period.
"It is best perhaps to give an outlook closer to the third quarter. We will be in a better position to indicate by then. It is, however, entirely possible to duplicate the first half numbers in the second half,” he said during a news conference.
Pangilinan said sound fundamentals of economy, healthy domestic and foreign investor confidence, as well as strong consumer demand have provided the underpinnings for further electricity sales volume growth in the first half of 2017. (READ: Lopezes to sell minority stake in EDC to consortium for up to P14B)
Electricity sales volume grew by 3% year-on-year to 20,338 gigawatt hour (GWh) to 20,338 GWh, despite the high base effect of the same period in 2016, where volume surged by 11% to 19,717GWh.
Meanwhile, Aboitiz Power Corporation saw its core net income increase P10.5 billion in the first half of 2017, 6% higher than that in the same period last year, thanks to its new power plants.
"Our core power generation and power distribution businesses have continued to post significant growth. Our new power plants are contributing significantly while our existing power plants are continuously improving in terms of availability and reliability," Antonio Moraza, AboitizPower president and chief operating officer, said in a statement.
"We will continue, likewise, to take advantage of the economic growth in our franchise areas by providing reliable and cost-effective power coupled with the best possible service," Moraza said.
During the first half of the year, AboitizPower's distribution business' net income contribution slightly went up by 3% to P1.8 billion. – Rappler.com