The Manila Electric Co.’s (Meralco) net income posted a double-digit surge last year, fueled by the improved power generation and retail electricity operations, as well as an uptick in energy sales through its distribution utility (DU) business.

Meralco, the largest power retailer in the country, disclosed on Monday, Feb. 26, that its consolidated net income from January to December last year jumped by 34 percent to P38 billion from P28.4 billion in the previous year.

The company also reported that its consolidated core net income for the year increased by 37 percent to P37.1 billion from P27.1 billion in 2022.

Meralco attributed the growth to substantial contributions from its power generation and retail electricity divisions, as well as a sustained rise in energy sales by its distribution utility business.

Manuel V. Pangilinan, Meralco chairman and chief executive officer, said the company's financial performance surpassed expectations, with total revenues hitting P443.6 billion, an increase from P426.5 billion in 2022.

Consolidated energy sales volumes in 2023 rose by four percent to 51,044 Gigawatt hours (GWh) from 48,916 GWh in the previous year.

Meralco's commercial segment continued to hold the largest share in the sales mix at 37 percent, while the residential segment maintained a 35 percent share and the industrial segment accounted for 29 percent.

In 2023, sales volumes in the commercial segment reached 19,005 GWh, reflecting a nine percent growth over 2022 and exceeding the performance levels recorded in the pre-pandemic year of 2019.

“This was driven by strong business recovery, higher demand of hotels and leisure sectors with increasing tourist arrivals and higher real estate demand, and upbeat public confidence that led to more in-person activities,” Meralco said.

Residential segment, meanwhile, registered a four percent growth to 17,781 GWh from 17,148 GWh in 2022.

“Despite slipping in the first quarter of 2023, subsequent quarters showed recovery in sales volumes, influenced by higher usage in cooling appliances due to the transition to warmer weather conditions brought by El Niño,” Maralco said.

“Incremental consumption from condominiums and dormitories due to face-to-face classes, more onsite work arrangements, and increased time spent at home during long holiday weekends contributed further to household demand,” it added.

On the other hand, the industrial segment registered a one percent decrease in sales volume to 14,113 GWh from 14,221 GWh.

This decline was primarily attributed to the semiconductor industry's year-end sales downturn, although there was a gradual recovery in the second half of the year as key accounts diversified into electric vehicle chips.

“Construction sectors, particularly cement and steel, meanwhile, were affected by import and supply challenges, self-generation from waste heat recovery, and production shutdowns,” Meralco said.

“On the other hand, food and beverage, and generation wheeling from embedded generators posted positive annual growth for the Industrial segment,” it added.

Meanwhile, Pangilinan said that Meralco plans to work towards sustainable energy security by investing in power generation projects, including potentially exploring nuclear energy adoption in the country.

In 2023, Meralco invested P30 billion in capital expenditures, with 67 percent (P20.2 billion) allocated to Network projects for new connections, asset renewals, and infrastructure support.