Lower MERALCO, GBP earnings take a toll on Metro Pacific’s 2020 income


Lower incomes and operating expenses of the Manila Electric Company (MERALCO) and Global Business Power Corporation (GBP) due to the COVID-19 pandemic were major factors in Metro Pacific Investment Corporation’s (MPIC) 34% earnings decrease last year.

MPIC said it posted a consolidated core net income (CCNI) of Php10.2 billion in 2020, Php5.4 billion less than the Php15.6 billion figure in 2019.

On Monday, MERALCO reported a nine percent drop in its own CCNI at Php21.7 billion last year from Php23.8 billion the previous year due to lower power sales not only caused by the pandemic, but also the Taal Volcano eruption and the series of violent storms that hit Luzon in the fourth quarter.

MPIC directly and indirectly owns 45.46% of MERALCO, the country’s largest power distributor.

Meanwhile, GBP’s core net income dropped 13% to Php2.4 billion in 2020 from Php2.7 billion in 2019. This was also due to lower power demand and thus, lower prices in the Wholesale Electricity Spot Market.

GBP is now owned by MERALCO PowerGen Corporation (MGen) after it bought out the interests of MPIC (via Beacon Powergen Holdings, Inc.) and JG Summit Holdings before the close of 2020. MGen is MERALCO’s power generation arm.

GBP is the Visayas’ third-largest power generator with a total generating capacity of 606 megawatts, based on the latest data from the Department of Energy. Formerly owned by GT Capital of the late Dr. George S.K. Ty, GBP also operates in Mindanao and Mindoro.

The combined day-to-day expenses of both power firms may still have formed bulk of the conglomerate’s overall operations in 2020, but still ended up lower compared to 2019.

MERALCO and GBP contributed to MPIC a total of Php10.5 billion or 69% of its operating costs. The amount is lower compared to the Php11.6 billion or 55% of the conglomerate’s previous annual operations.

“We have come through the most difficult year we have ever seen as the operations of our portfolio companies have been significantly affected by the pandemic. At the parent level however, we endeavored to preserve our balance sheet and optimize capital allocation as evidenced by our recent asset monetization efforts. It is difficult to ascertain the pace of growth in economic activity so we believe it is prudent to ensure that our financial position is robust and can sustain operations and expansion even in a prolonged period of recovery,” MPIC President Jose Ma. Lim said in a statement.

MPIC Chairman Manny V. Pangilinan, meanwhile, recognized the pandemic’s impact on the group’s businesses, but remains optimistic.

“[It] should strongly be noted that we remained steady in investing for the future while continuing to deliver decent returns to our shareholders, employees, business partners, and the communities we engage and serve. We keep our stakeholders at the heart of every decision we make. We learn what we can learn from our recent experiences, but we forge ahead,” Pangilinan emphasized.