MERALCO sees increase in net profit

MERALCO power lines

The Manila Electric Company (MERALCO) is expecting substantial growth in its net income this year, propelled by its power generation business, as stated by Chairman Manuel V. Pangilinan.

In a report by the Business World, Pangilinan expressed optimism about MERALCO’s financial performance, particularly in the power generation sector, and expects a substantial increase in profits, indicating a promising year for the company as a whole.

The expansion of MERALCO’s subsidiaries in both the power and non-power sectors serves as the foundation for its business growth potential. However, there were instances last year where certain entities, such as the Global Business Power Corporation (GBP), incurred losses.

MERALCO PowerGen Corporation (MGen), the power generation arm of MERALCO, fully owns the GBP, 

Additionally, Pangilinan mentioned that GBP incurred losses due to the adverse effects of Typhoon Odette in the Visayas region. The operation of GBP was further impacted by fixed-rate contracts amid elevated fuel prices during the Russian-Ukraine war.

The company is actively pursuing strategies to revitalize the underperforming plants starting this year. Both GBP and MGen have made significant contributions to MERALCO’s financial performance by putting an end to fixed-rate contracts, resulting in positive impacts on the company’s bottom line, Pangilinan said. 

The energy company achieved a core net income of Php 9.05 billion in the first quarter of 2023, a significant growth of 40.5% compared to the previous year’s figure of Php 6.44 billion. This positive performance can be attributed to sustained energy and revenue growth.

In other developments, MERALCO’s first vice president and chief sustainability officer, Raymond B. Ravelo, announced that the company is significantly increasing its clean energy pipeline to 1,700 megawatts (MW) or 1.7 gigawatts as part of its renewable energy (RE) expansion efforts.

Ravelo elaborated that MERALCO’s main focus is to establish 1,500 MW of renewable energy capacity. Currently, their pipeline comprises 1,700 MW, encompassing various projects at different stages of development. These projects span different renewable energy technologies such as solar, wind, and battery energy storage systems.

The company is committed to renewable energy and is prepared to transition its Atimonan energy project from coal to liquefied natural gas (LNG) as its baseload power source.