Stock Commentary: Meralco’s first-quarter net profit rose 28% to 5.6 billion pesos

Meralco [MER 347.00 1.34%] giant electricity distribution company, reported a net profit of 5.6 billion pesos in Q1/22, up 29% from the 4.3 billion pesos it reported in the first quarter of the year. ‘last year.

Consolidated core net income increased 10%, which MER attributes to “higher contributions” from its power generation business and higher volume of power sold.

The company attributes the pro-profit impact of the CREATE law to the difference between its “net result” and its “core consolidated net result”.

MER said the continued easing of movement restrictions had led to higher energy consumption in “all segments”, and its number of customers had increased by 4% to 7.46 million while New regions of the country are “energized” and as economic activity continues to come back online. in a hybrid on-side/WFH environment.

MER warned that Russia’s ongoing invasion of Ukraine and the resulting (and will result) uncertainty in global energy markets could have “a significant impact on electricity consumption customers in the future”.


Electricity consumption is (usually) a good signal of economic activity and growth.

Does this mean that we can consider brownouts as a positive sign for the economy?

No, no, not really; the electricity industry is a truly fascinating mix of public policy, long-term planning, financial incentives and demographics, and all of this before even getting to the basics of supply and demand.

Still, the increase in sales is a good sign for our country and its economy.

The warning that the price of electricity in the world could reduce electricity consumption “in the future” is a little worrying, because it is essentially a warning from the MER that the Russia / Ukraine still has the potential to trigger a wider economic crisis. It does.

But that doesn’t mean it’s certain or that it will happen. Just something to put in the brain for future use if we saw data suggesting a decrease in customer growth and consumption, or a slight increase in the market conflict or uncertainty it might cause.

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