[PHOTO - Holiday rush. Passengers jam the Araneta Center bus terminal in Quezon City Tuesday ahead of the four-day Christmas weekend. MANNY PALMERO]
MANILA, DECEMBER 24, 2010 (MANILA STANDARD) by Alena Mae S. Flores - Manila Electric Co., the country's largest power distributor, expects consolidated net income to reach close to P12 billion this year from P6.356 billion last year.
Oscar Reyes, Meralco senior vice president and chief operating officer, told reporters Wednesday that a 10-percent monthly average growth in electricity sales this year would lift the company's profit near P12 billion.
"This year we are looking at a net income of approaching P12 billion, around P11.5 billion to P11.7 billion. We are approaching 30 billion kilowatt-hour sales, a record sales level," Reyes said.
He attributed the significant increase in net income to the double-digit growth in industrial sales and the single-digit expansion in revenue from commercial and residential customers.
"We are also hopeful that sales will continue to be healthy next year but we do not expect the same level of sales growth as this year," Reyes said.
Consolidated sales revenues are expected to reach close to P250 billion this year from P185 billion a year ago.
"Our net income reflects the impact of our very strong sales," Reyes said.
The official said Meralco had been taking advance of the market liquidity and low interest rates by borrowing since November.
"The conditions for businesses appear to be favorable this time. It's an extraordinary time for financing. It's certainly helping fund businesses. Normally, the constraint to businesses is financing but now they've made that available," he said.
Meralco recently signed a P2.5 billion seven-year term loan agreement with Philippine National Bank to fund general operations. It also signed a P5-billion note facility agreement with arranger and bookrunner First Metro Investment Corp.
Meralco in early November also signed a P4.8-billion fixed rate notes facility with BPI Capital Corp. as issue manager and book runner.
Meralco serves over 4.8 million customers in its franchise area. It is now controlled by Philippine Long Distance Telephone Co., San Miguel Corp. and First Philippine Holdings Corp.
Meralco spends about P7 billion to P8 billion annually for its electric capital projects to improve reliability and system capability. The company is set to complete 12 more electric capital projects by the end of the year.
The 12 projects will add a total of 249 mega-volt amperes to its distribution substation capacity.
It said technical system loss was expected to be further reduced by 6,009,301 kilowatt-hours per year after completion of the 12 electric capital projects.
This will translate into around P37.3 million in reduced system loss charges to customers.
"These projects include three new distribution substations, one sub-transmission line upgrading, one sub-transmission line reconfiguration and upgrading of seven distribution lines," Meralco executive vice president and networks head Ricardo Buencamino said.
"With these electric capital projects, Meralco affirms its commitment to continually improve the service it provides to its customers," Buencamino said.
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