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Monday, April 28, 2014

MER: Meralco's first quarter earnings flat at P4B

The Energy Regulatory Commission's order to recompute and lower electricity spot market rates as well as higher expenses contributed to flat net earnings for Manila Electric Company (Meralco) in the first quarter.

In a disclosure to the Philippine Stock Exchange on Monday, Meralco said consolidated net income stood at P4 billion, 0.4 percent lower than the P4.02 billion a year earlier.

Core net income – which excludes one-time, exceptional charges – inched higher by 1.6 percent to P4.09 billion from P4.02 billion in the same comparable period.

"This was the result of the combined effect of a two-percent increase in volume attributable to new accounts in the gaming and entertainment sector... and significantly higher contributions from Meralco's operating subsidiaries, offset by the effect of the decrease in distribution rate," the statement read.

Consolidated revenues slipped by 15 percent to P55.1 billion from P64.8 billion on electric revenues which accounted for 98 percent of the total due to lowered Wholesale Electricity Spot Market (WESM) rates.

In March, Philippine Electricity Market Corporation (PEMC) said rates at the spot market were reduced by 80 percent after the ERC ordered the WESM operator to recompute and issue regulated prices from Oct. 26 to Dec. 25.

Operating expenses, meanwhile, increased by 9 percent to P4.3 billion from P4 billion.

With flat first quarter net income, "2014 is proving to be a highly challenging year for the company," Meralco chairman Manuel V. Pangilinan said.

"We will persist in strengthening our core distribution business, in seeing our power generation projects completed, and in maintaining our competitiveness in retail electricity supply," he said.

"We wish to have clear visibility on the commercial and financial results during the second quarter, and intend to provide guidance on the company's core net income expectations at our July 2014 briefing," Pangilinan added.

- GMA News

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