The Manila Electric Co. (Meralco) posted in the first quarter a 66-percent increase in reported income to P4.3 billion, while core profit fell 11 percent to P5.1 billion compared to year-ago figures.
Meralco Chief Finance Officer Betty Siy-Yap said during Monday’s briefing that the company’s net income was largely attributed to foreign exchange (forex) gain, re-evaluation of Meralco’s investment in Global Business Power Corp. (GBPC) and non-core expense adjustment.
“Forex is a small amount. There was forex gain of P52 million because when we account for core net income, we take out forex. We considered it as a one-time thing. For GBPC, it was more of a re-evaluation of the existing carrying amount of our 14-percent equity in GBPC. That was about P207 million. Another item is none-core expenses of P705 million and this relates to implementation of provisions of the CREATE [Corporate Recovery and Tax Incentives for Enterprises],” said Yap.
Meralco’s power generation arm, Meralco PowerGen Corp., completed last March 31 the acquisition of the 86-percent combined equity in GBPC from Metro Pacific Investments Corp. and JG Summit Holdings Inc.
Meralco and MGen drew a 5-year term loan amounting to P5 billion and a P17-billion bridge loan, respectively, to cover the first installment of the GBPC purchase price of P19.6 billion. The balance of the installments is payable up to September 2022.
Meralco’s lower core profit, meanwhile, was due to its share in the P2.7- billion investment impairment of Singapore-based PacificLight Power Pte. Ltd.
Energy sales volume shrank by 4 percent to 10,473 gigawatt hours (GWh) as demand was affected by the pandemic. However, the general community quarantine (GCQ) and the re-imposition of the enhanced community quarantine (ECQ) beginning March 29 saw residential volumes taking a bigger share in the total volumes sold as work-from-home arrangement and stay-at-home policies prevailed throughout the first quarter of 2021.
The share of Industrial sales volumes was at 31 percent, representing 3,261 GWh. Industrial sales volumes bounced back, reflecting a 4-percent quarter-on-quarter growth.
Commercial sales volumes were at 34 percent of the total, with total volume at 3,560 GWh or 18 percent lower.
Overall customer count grew to 7.2 million at end-March.
Meralco Chairman Manuel V. Pangilinan said the recent surge in the number of infections and its toll on the country’s healthcare system, as well as the delay in the arrival of vaccines, pushes back expectations of an early economic recovery.
“As such, we continue to revisit and recalibrate our strategies, priorities and plans. As we do so, we re-affirm our commitment to our customers to keep the lights on. While doing so, we recognize that our people remain to be our single most important asset and will continue to ensure their well-being,” he said.
He said that second quarter demand should be better than what Meralco had recorded in the same period last year.
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