Philippines: Meralco reaches P19B 2016 core income target

Philippines: Meralco reaches P19B 2016 core income target

THE MANILA ELECTRIC CO. (MERALCO) RECORDED A P19.58 BILLION CORE NET INCOME
IN 2016, UP FOUR PERCENT FROM THE PREVIOUS YEAR.

Meralco chief finance officer Betty Siy-Yap said that the company's core net
income rose by four percent from P18.89 billion in 2015.

Reported energy sales went up 8.1 percent to 40, 142 gigawatt-hours (GWh),
and customer base increased by 4.4 percent to 6.04 million customers.

However, consolidated revenues went down to P257.18 billion as lower
pass-through prices muted the impact of volume energy distributed increase,
and the lower average consolidated distribution rate.

"If you had a perfect storm, this was perfect weather. Number one, economy
was buoyant and strong with growth at 6.8 percent, we had much warmer temp
particularly in the first five months of 2016. Low inflation, low interest
rates were favorable for consumers and at the same time, we saw remittances
from OFWs as well as revenues of BPOs continued to increase and this
provided a strong basis for consumer spending to be very strong and, as a
result, I am pleased to advise Meralco continued to have a reasonably,
favorable year," Meralco president Oscar Reyes said.

But Meralco is turning cautious this year with oil and coal prices,
temperature, commodities, and foreign exchange performance with the looming
interest rate hike in the US.

"The first two months, looking at billed volume in January, rose 6.9 percent
which was excellent. Then February sort of turned south at 1.4 percent. It's
difficult to ascertain demand profile for 2017 would look like so consensus
was to defer guidance until we get a better sense," Meralco chairman Manuel
Pangilinan said.

Reyes said that coal prices have moved from $50 to $100 while oil rose to
$50 and is seen to play around $60 to $70.

"These are things that require.monitoring and anticipated action or
reaction, how do we offset the adverse negative effect on our operations and
on consumers pockets," Reyes said. "There's some view to being prudent and
deferring any guidance until we see the shape of what's happening."

Pangilinan said there remains room for growth for Meralco as soon as its
power plants start operating.

"We are always optimistic and management is under the mandate of continuing
bottom line, where the major driver for that is through] power generation
investments which may manifest itself maybe in 2019 when San Buenaventura
Power Limited in Quezon becomes operational. After that, there should be a
series of plants that should be built and finished by 2020," he said.

--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---

Link to Original Article:
http://powerphilippines.com/2017/02/28/meralco-reaches-p19b-2016-core-income
-target/

--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---

John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com