Manila Electric Co., the country’s largest power distribution company, said Monday first-half net income rose 36 percent year-on-year to P17.9 billion on the back of strong gains from its power generation business.
Meralco said total revenue in the first half was up 13 percent to P224.8 billion due to pass-on fuel charges of the distribution utilities and energy fee of the non-renewable power plants; the depreciation of the peso against the US dollar; higher prices and energy purchases from the Wholesale Electricity Spot Market; and the combined impact of higher volume of distributed electricity and higher average distribution rate.
The average retail rate increased by 14 percent to P10.68 per kilowatt-hour as the generation charge–around 68 percent of the retail rate—rose 25 percent. Transmission charge, comprising 7 percent of the retail rate, decreased by 10 percent while subsidies and taxes were up 10 percent.
Meralco said average distribution charge of P1.08 per kWh, which accounted for 9 percent of the retail rate, was down 11 percent following the implementation of distribution rate true up adjustments. Meralco completed in May the 28-month, P48.3 billion DRTU refund ordered by the Energy Regulatory Commission.
Purchased power cost went up by 13 percent to P167.5 billion.
Meralco spent P14.1 billion as capital expenditures in the first half, with P9.6 billion going to new connections, asset renewals, and load growth projects. The company spent P2 billion for its tower business while P461 million went to power generation.
Operating expenses in the first half rose 7 percent to P18.2 billion driven by higher manpower count, bills management-related expenses, cybersecurity costs related to CIS Bayad Center operations, and other sales-related expenses.
Electricity sales volumes in the first half rose by 3 percent to 24,792 gigawatt-hours, with sales by Meralco and its unit Clark Electric Distribution Corp. rising 3 percent and 7 percent, respectively.
“Our record-high sales volumes reflect strong rebound in terms of power demand. As we expect this growth trajectory to continue, we will aggressively invest in distribution network upgrades and expansion, and implement more programs that will improve overall customer experience,” Meralco executive vice president and chief operating officer Ronnie L. Aperocho, said.
Meralco chairman and chief executive officer Manuel Pangilinan said that because of the power company’s first-half results it is “reasonable” for the market to expect record sales and earnings for the whole of 2023.
“Beyond the core distribution business, we have always considered the expansion of our power and non-power subsidiaries as important growth pillars for Meralco. We expect a significant boost to our bottom line this year from the power generation business in particular, which will also drive Meralco’s growth moving forward, especially as we pursue larger generation projects that will help meet the country’s growing demand for power and decarbonization goals,” Pangilinan said.
