Meralco registers 34% growth in 2023 profit

Manila Electric Company (Meralco) reported an increase of 34 percent in its net income to P38 billion in 2023 from P28.4 billion in 2022 mainly brought about by strong growth in energy sales and higher earnings from its power generation businesses, according to a report by BusinessMirror.

The utility firm also recorded higher Consolidated Core Net Income (CCNI) from P27.1 billion in 2022 to P37.1 billion in 2023. Meralco reported that 64 percent of its CCNI came from its power distribution business while 26 percent accounted for its power generation business under Meralco PowerGen Corp. (MGen).

MGen contributed P9.7 billion to Meralco’s CCNI, 80 percent higher than the P5.4 billion posted in the same period in 2022, driven by continuing positive performance of PacificLight Power Pte. Ltd. (PacificLight), the recovery of Global Business Power Corporation (GBP), and the contribution of MGen Renewable Energy, Inc.’s (MGreen) solar power projects. As of end-2023, MGen had combined power generation capacity of 2,240 megawatts (MW) in the Philippines and in Singapore.

“I daresay that Meralco’s 2023 performance has exceeded expectations. This year, we expect to move forward with our long-term goal of achieving sustainable energy security through our investments in utility scale power generation projects, including exploring the possible adoption of nuclear energy in the country,” Meralco Chairman and CEO Manuel V. Pangilinan said.

Revenues grew by four percent to P443.6 billion, driven by the distribution business as sales volume grew by four percent last year.

Energy sales volume was recorded at 51,044 gigawatt hours (GWh) from 48,916 GWh the previous year. Commercial segment maintained the largest share in the sales mix, increasing to 37 percent from 36 percent previously. Residential share remained at 35 percent while Industrial segment’s share slightly dipped from 29 percent to 28 percent.

Sales volumes of the commercial segment was at 19,005 GWh by the end of the year, 9 percent higher than the 17,403 GWh in 2022, and surpassing pre-pandemic 2019 performance. 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.

Residential segment 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.

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, Meralco said.

Industrial segment saw its sales volume slip by 1 percent to 14,113 GWh from 14,221 GWh, as the semiconductor industry posted negative year-end sales, despite gradual recovery in the second half as key accounts diversified into electric vehicle (EV) chips. Construction sectors, particularly cement and steel, meanwhile, were affected by import and supply challenges, self-generation from waste heat recovery, and production shutdowns. On the other hand, food and beverage, and generation wheeling from embedded generators posted positive annual growth for the Industrial segment.

Growth in consolidated customer count was sustained as it ended 2023 at 7.8 million from 7.6 million in 2022.

Meralco’s operating expenses remained flat at P37.5 billion.

The Meralco Board of Directors approved a cash dividend of P11.235 a share to all shareholders of record as at March 27, 2024, payable on April 24, 2024. This brings the total dividend declared out of the 2023 CCNI to P19.755 a share or for a total of P22.3 billion.