Manila Electric (MER) Q3 2024 earnings summary

Executive summary

• Achieved record consolidated core net income (CCNI) of PHP 35.1 billion for the nine months ended September 30, 2024, up 17% year-over-year, driven by strong performance across all business segments and higher sales volumes.

• S&P upgraded the long-term credit rating to BBB with a stable outlook, citing robust financials and strategic investments.

• Consolidated revenues grew 6% to PHP 355.4 billion, with energy sales volume up 7% year-over-year.

• Distribution utility sales volume reached a record 40,872 GWh, with residential and commercial segments growing 10% and 8%, respectively.

Financial highlights

• Reported net income for the nine months rose 19% to PHP 33.8 billion; core EBITDA increased 16% to PHP 59 billion.

• Core EPS up 17% to PHP 31.137; reported EPS up 19% to PHP 29.948.

• Purchased power cost rose 5% to PHP 262 billion, representing 82% of total costs.

• Dividends from unconsolidated investees totaled PHP 8.6 billion, mainly from PacificLight and San Buenaventura.

• Total costs and expenses rose 4% to PHP 318.99 billion, mainly due to higher purchased power and OPEX.

Outlook and guidance

• Management expects to exceed the PHP 43 billion profit guidance for 2024, with all business segments expected to deliver strong results.

• Projecting modest 3% energy sales growth in Q4 2024, with full-year growth at 6% and total sales volume expected to reach 53,350+ GWh.

• Distribution CapEx budgeted at PHP 25 billion annually for the next two years, rising to PHP 30 billion per year beyond 2026.

• Franchise renewal advanced with House Bill No. 10926 approved on second reading; Senate deliberations expected.

• New power supply agreements secured for 600 MW baseload and 400 MW mid-merit requirements, effective September 2025.