THE Manila Electric Co. (Meralco) has set a full-year core profit guidance of P18.5 billion in 2015, after having posted P11.6 billion in core income at end-June this year.
This means that Meralco would have to report a consolidated core net income of P6.9 billion in the July-to-December period to meet its target profit for the year. “Full-year results are guided at P18.5 billion for 2015, compared to last year’s core profit of P18.1 billion,” said Meralco Chairman Manuel V. Pangilinan during a news conference of the utility firm’s first-half 2015 financial and operating results. At end-June this year, Meralco posted an P11.6-billion core-net income. The numbers are 18 percent higher than in the same period a year ago. Reported net income for the first semester of the year stood at P11.7 billion, 22 percent higher than in the first half of 2014.
However, Pangilinan said the second half of 2015 will have its challenges. These include a reduced-distribution tariff from the last implemented rate in the Third Regulatory Period of P1.5562 per kilowatt-hour (kWh) to an interim average of P1.3810 per kWh, scheduled plant maintenance shutdown and higher expenses for project-development costs of its subsidiaries. The Meralco official said these will weigh down on the utilities’ second-half results.
“While we expect volume in the second half of 2015 to be slightly better than the first half, absent destructive weather disturbances, the lower interim rate implemented will weigh on our results. On this basis, we guide our full- year results at P18.5 billion,” said Pangilinan, adding that the effect of the approved interim rate will have a P2.2-billion effect to Meralco’s bottom line.
Meralco’s revenues hit P134 billion, just 1 percent higher year-on-year. During the six months that ended June, the volume of energy sold stood at 17,753 gigawatt-hours (GWh), 3 percent 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 percent of the total volume sold, while residential and industrial volume each provided 30 percent of the total volume for the first half of 2015.
Meralco customers at end-June stood at 5.68 million. Total capital expenditures for the first six months amounted to P5.8 billion.
“Meralco needs to be ahead of the curve by anticipating our customers’ needs. We will continue to invest heavily. Capital expenditures for Smart grid, prepaid electricity , e-vehicles, distributed generation and renewables will increasingly feature in our investment program,” Meralco President Oscar Reyes said.
The board of directors, meanwhile, approved the declaration of cash dividend of P6.76 a share. On top of the regular dividend representing 50 percent of the 2015 interim earnings, the company is paying an additional 10 percent special dividend out of the 2014 consolidated core net earnings, bringing payout for 2014 to 90 percent.