Meralco net income declines 43% to P6.8 B

Published July 27, 2020, 10:00 PM

by Myrna M. Velasco

Amid sales downtrend mainly during the lockdown period because of the coronavirus pandemic, the reported net income of Manila Electric Company (Meralco) dipped 43-percent to P6.844 billion in the first half of the year versus a healthier financial outcome of P12.0 billion in the same period in 2019.

The utility firm’s consolidated core net income was so far at a healthier balance of P10.588 billion in the initial six months, down by a more manageable 14-percent from a rosier P12.317 billion the previous year.

Given the lingering impact of the pandemic and with the economic reopening largely depending on the pace enforced by the Inter-Agency Task Force (IATF), Meralco Chairman Manuel V. Pangilinan indicated that the utility firm’s targeted core income for full year 2020 shall be at P21 billion, lower than last year’s P23.4 billion.

Meralco Chief Finance Officer Betty Siy-Yap explained that the drop in income was partly attributed “to the company’s share in the impairment of an equity investment of P2.7 billion in the first quarter of 2020.”

Based on the company’s first half financial turnout, Meralco logged core earnings per share at P9.394; and that also warranted declaration by its board of directors of interim cash dividend of P4.697 per share to all shareholders as of record date August 20, 2020 and to be payable on September 15.

Within the review period, Meralco Vice President and Head of Customer Retail Services Victor Genuino noted that in the franchise area of Meralco, overall sales volume had been lower by 7.0-percent; while a reduction of 15-percent had been posted by its affiliate Clark Electric Distribution Corporation.

And while there had been manifest shift in consumption growth in the residential sector, he emphasized that the traditional performers in the commercial sector primarily retail trade, real estate as well as hotels and restaurants were generally laggard in the initial months of the year because of the niggling

impact of the health crisis.

Onward, he noted that the sectors that will reinvigorate demand growth will be the Philippine Offshore Gaming Operators (POGOs), business process outsourcing (BPOs), financial activities, personal care services, dine-in for food and the wider resumption of the retail sector.

“While industries continue to be hampered by the lack of public transportation, there is a gradual ramp up of industrial sales volumes of export-oriented companies, mainly semiconductor and electrical machinery, which are operating between 50-percent to full operational capacity,” the utility firm said.

Meralco President Ray C. Espinosa said the company looks forward to recovery pathway in remaining five months of the year, noting that part of their adjusted outlook is to “enable micro- small and medium-sized enterprises (MSMEs), commercial and industrial customers to bounce back as stimulus is provided and as capital slowly flows back into the system.”

He added the utility firm is “looking at their requirements and ensuring that we are ready to energize them ahead when and as needed.”

The next investment trajectory for the power firm shall be focused on automation as well as wider digitalization of its network to prevent a repeat of the problematic billings when their people cannot be deployed to do meter reading at the height of the lockdowns enforced by the government.