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Meralco’s core net income down 11% in first quarter

MANILA Electric Co. (Meralco) posted a consolidated core net income of P5.11 billion in the first quarter, a decline of 11% year on year, after a slump in energy sales to the commercial sector due to the impact of the pandemic.

“Despite the continued strong sales from residential customers and the recovery of industrial sales, the commercial sector, however, struggled as restaurants, malls, hotels are not yet operating at their pre-pandemic level,” Meralco Senior Vice-President and Chief Finance Officer Betty C. Siy-Yap said during the distribution utility’s briefing on Monday to present its financial and operating results.

Reported net income, which excludes one-off items, rose by 66% to P4.33 billion on the back of the company’s “share in impairment of the investment” in Singaporean electricity retailer PacificLight Power Pte. Ltd., the listed electricity seller said in a separate press release.

Gross revenues for the quarter slid by 7% to P64.71 billion, which was mainly attributed to lower distributed volumes and a decrease in generation and pass-through charges.

Ferdinand O. Geluz, Meralco first vice-president and head of supply chain and logistics management, said the first-quarter performance was driven by strong growth from the residential and industrial segments, “but overall numbers were dragged down by the commercial [sector], which still lags [at] around 18% [year on year] due to the effects of the pandemic.”

Energy sales in the residential and industrial sectors improved by 7% to 3,616 gigawatts per hour (GWh), and 4% to 3,261 GWh, respectively. Meanwhile, sales in the commercial segment slid by 18% to 3,560 GWh.

From January to March, Meralco was able to implement P4.2 billion of capital expenditure projects, the majority of which went to five substations.

“While 2021 began with hopes for a restart in the economy, the recent surge in the number of infections and its toll on the country’s health-care system, as well as delay in the arrival of vaccines, pushes back expectations of an early economic recovery,” Meralco Chairman Manuel V. Pangilinan was quoted as saying in the firm’s press release.

He added: “We cannot lose to the virus and this is not the time to give up. Meralco’s strong financial position amidst regulatory challenges has allowed it to sustain the much-needed investments for a resilient and reliable networks infrastructure… We will continue to be agile and look at these challenges as opportunities for us to emerge as a better and even stronger organization.”

During the briefing, Mr. Pangilinan said that the company “remains optimistic” about this year’s financial results.

“[The] second quarter of Meralco [this year] should be better than the second quarter last year. All businesses were hit last year. The second quarter performance was poor last year, except for PLDT’s,” he said in a mix of English and Tagalog. Mr. Pangilinan is also chairman of PLDT, Inc.

Shares of Meralco in the local bourse were unchanged at P275 apiece on Monday.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., which has interest in BusinessWorld through the Philippine Star Group, which it controls. — Angelica Y. Yang

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