MANILA, Philippines – Manila Electric Co. (Meralco) posted flat net income for the first half of 2014 of P9.6 billion, only 2 percent higher compared to the net income reported in the same period last year.
Meralco, the country’s largest power distributor, saw a decline in its consolidated revenues in the first six months of 2014 of nearly P10 billion to P132.2 billion from P141.7 billion in 2013.
The firm said the decline was due to the P9.3 billion downward adjustment of pass-through charges on Meralco’s purchases from the Wholesale Electricity Spot Market (WESM) billed by the Philippine Electricity Market Corporation (PEMC) based on the order of the Energy Regulatory Commission.
The drop in revenues was also attributed to lower system loss charge and to foregone revenues on the volume of contestable customers served by other retail electricity suppliers under the Retail Competition and Open Access.
There was also a decline in residential volume due to the longer duration of cooler days, higher inflation, and April holidays.
The consolidated core net income, however, grew 8 percent to P9.9 billion from the P9.2 billion a year ago driven by the volume of electricity sold and contribution from operating subsidiaries.
“Continued growth in electricity sales volume, albeit muted by cooler average temperature, higher inflation rate and sustained operational excellence and efficiency, were the key drivers which enabled Meralco to post modest gains in consolidated net income,” said Meralco chairman Manuel V. Pangilinan.
Pangilinan, however, noted that the “lack of reliable generating capacity to meet growing demand, which has become more evident since November 2013, remains to be the major challenge to power supply and pricing stability.”
Pangilinan said the absence of any new capacity built for more than 10 years will need to be addressed.
“This suggests expeditious regulatory and administrative approvals and permitting for new power generating plants, transmission and distribution projects, and the support of LGUs and local communities,” he said.
Meralco said that despite the country’s tight power supply situation, it saw a 3 percent increase in energy sales volume for the first half of the year.
An increase in its customer base and higher demand pushed the firm’s year-to-date peak demand to 6,121 megawatts, 3 percent higher than the peak in 2013.
Meralco reported that 89 percent of its circuits and 87 percent or 4.6 million of its customers were affected by the recent devastation of Typhoon Glenda on July 16.
Full restoration of Meralco’s circuits was achieved by July 21.