Manila Electric (MER) Q3 2025 earnings summary

Executive summary

• Core net income rose 14% year-over-year to PHP 40 billion, driven by robust power generation and steady distribution performance.

• Consolidated reported net income increased 9% to PHP 36.8 billion; core EBITDA rose 14% to PHP 67.2 billion.

• Power generation's CCNI contribution surged 63% to PHP 14.7 billion, now 37% of total, while distribution utility contributed 55% or PHP 21.9 billion, up 8%.

• System-wide power sales volume reached 50,880 GWh, with distribution utility sales at 40,719 GWh.

Financial highlights

• Revenues grew 5% year-over-year to PHP 371.8 billion, mainly from higher pass-through charges and increased generation revenues.

• Purchase power costs rose 7% to PHP 281.6 billion, accounting for 85% of total costs; OPEX up 13% to PHP 32.5 billion.

• Capital expenditures reached PHP 78.8 billion, with 75% allocated to solar projects and a 203% year-over-year surge.

• Cash and cash equivalents at PHP 88.2 billion; consolidated debt at PHP 213.4 billion.

• Core EPS up 14% to PHP 35.509; reported EPS up 9% to PHP 32.67.

Outlook and guidance

• Management is confident in achieving full-year core profit guidance of PHP 50 billion, supported by growth in power generation and steady distribution.

• DU volume growth expected to remain slightly negative for Q4 2025 due to La Niña and weak demand, with potential recovery in 2026.

• Terra Solar phase 1 is 65% complete, on track for August 2026 COD; EBITDA margin for Terra Solar expected north of 80%.

• Spot market prices expected to remain low as new capacities come online.

• Regulatory developments and new guidelines on indigenous natural gas procurement expected to impact future operations.