Owing mainly to the coronavirus pandemic-induced sales decline, the core net income of Manila Electric Company (Meralco) went down 9.0-percent to P21.711 billion last year from a robust bottom line outcome of P23.832 billion in 2019.
The utility firm’s reported net income suffered an even deeper contraction to P16.316 billion in 2020 versus a flourishing P23.285 billion in the prior year.
Despite the downturn in its financial performance, the core income of the company in the Covid-hit year still topped the guidance of P21 billion earlier set by Meralco Chairman Manuel V. Pangilinan.
For this year though, he is a bit more cautious in setting out income projection for the utility firm given the turbulent state yet of the Philippine economy; and while the Covid-19 vaccination program underpinned by the government has yet to accelerate.
“It’s a very volatile environment that we foresee for 2021, given the continuing effect of the pandemic on the economy,” Pangilinan said, adding that the volumes sold in January this year was still lower compared to the same month in 2020.
Nevertheless, he emphasized that there’s an encouraging precept in the February sales, which had gone up versus last month.
“By the latter part of February this year, the numbers have improved in terms of volumes sold compared to January this year, and that portends a positive trend for the balance of the year,” he said.
Meralco Chief Finance Officer Betty Siy-Yap explained it was the slump in the second quarter sales last year that mainly pulled down the company’s profitability given the strict quarantine protocols enforced within the March to May period because of the health crisis.
She added the power firm also had provision for P1.4 billion worth of “bad debts” because of the deferred payments and the extended non-disconnection of customers, primarily for arrears that piled up during the enhanced community quarantine (ECQ) enforcements of the government.
As noted by Meralco President Ray C. Espinosa, while there had been shift in energy demand growth in the residential sector because of the quarantine measures, it was the commercial sector that suffered the most last year; and there was also substantial downtrend in the demand of the industrial sector.
The company’s core earnings before interest, taxes, depreciation and amortization (EBITDA) had also been down to P35.287 billion last year versus P38.026 billion in 2019; while reported EBITDA had also been trimmed to P29.847 billion in 2020 as against P40.977 billion a year ago.
And on account of cheaper electricity rates last year, the company’s revenues also decelerated to P275.304 billion last year compared to strapping P318.315 billion in 2019.