Saturday, August 16, 2008 Meralco posts increase in income
DESPITE the controversy hounding the country's largest distribution utility, Lopez-owned Manila Electric Company (Meralco) reported that its net income for the first six months of 2008 increased by a minimal of 0.72 percent from P1.81 billion in 2007 to P1.82 billion this year.
However, revenues from distribution dropped by one percent from P7.04 billion in 2007 to P6.97 billion this year.
"Because of lower generation charges this year, total revenues declined by 17 percent to P49.1 billion in the second quarter compared to the same period in 2007. Likewise for the six-month period, revenues decreased by 13.6 percent from P107.39 billion to P92.75 billion," Meralco said in a report submitted to the Securities and Exchange Commission (SEC) last Friday.
The power firm further noted that total expenses for the second quarter went down by 17.7 percent to P46.46 billion, from P56.43 billion last year while the six-month figure likewise decreased from P103.83 billion to P89.22 billion, or by 14.1 percent.
Major components of these expenses were purchased power, operations and maintenance and depreciation.
Purchased power cost also dipped by 18.7 percent to P40.76 billion in the second quarter. For the six-month period, the decrease was 15.2 percent to P78.71 billion.
According to Meralco, the business segment that showed improvements and contributed to their income includes the energy sales which rose by 1.6 percent to 6,911.8 gigawatt per hour (gwh) compared to the same period last year.
The commercial and industrial segments performed strongly, offsetting the decline in energy sales of the residential segment.
"This quarter's increase, however, was lower than the 4.6 percent growth posted in the second quarter of 2007 due to the effects of inflationary pressures, lower temperature and interruptions caused by Typhoon Frank on June 22," the company explained.
The commercial segment led the sales growth at 4.7 percent, fueled by the increased consumption of customers under the real estate, trade and transport, storage and communications (TSC) sectors.
This growth, however, was below the 5.5 percent increase posted by this segment last year.
The consumption of the commercial segment is expected to increase in the next months as new major customers added about 27 megawatt (MW) of demand in the second quarter.
Residential sales, on the other hand, declined by 2.9 percent, as compared to the five percent growth last year, as households reduced their consumption due to rising fuel and commodity prices.
Added to this decline is the inflation rate reached 11.4 percent in June, the highest in 14 years. This quarter's consumption was further aggravated by lower temperatures and interruptions caused by Typhoon Frank.
These economic and environmental circumstances caused a slowdown in year-to-date energy sales which grew by 1.8 percent to 13,068 gwh, compared to the 4.2 percent growth last year.
On the other hand, Meralco said its capital expenditures for the quarter declined by 3.84 percent from P2.19 billion last year to P2.10 billion this year.
The investments were used to address customer load growth, replace dilapidated and obsolete electrical facilities and reduce system loss.
For the six-month period, total capital expenditures decreased by 14.68 percent from P3.61 billion to P3.08 billion. The decline in capital expenditures was partly caused by the improvement in foreign exchange rates in January-June 2008. (MSN/Sunnex)
