The Manila Electric Co. (Meralco) has adjusted its energy sales growth forecast for 2025 to flat or slightly negative, marking the second downward revision this year as prolonged bad weather continues to dampen electricity demand.
Ferdinand Geluz, SVP and chief revenue officer of Meralco, told reporters the company now expects sales growth of flat to negative 0.4 percent to 0.8 percent by yearend, down from an earlier projection of 1 percent to 2 percent growth announced mid-year.
The revised outlook represents a deterioration from Meralco’s original target of 4 percent to 4.5 percent sales growth at the start of 2025.
Geluz attributed the downgrade to worsening weather patterns that have persisted throughout the year, contrary to the company’s expectations for normalization.
‘We were hoping for a normalization of weather patterns but we see worsening weather patterns,’ Geluz said during a briefing on the company’s nine-month financial results. ‘In fact, in the third quarter alone, we had 10 more suspension of classes and even government offices.’
He explained that the heavy rains and flooding impeded the mobility of both residential and commercial customers, directly suppressing power consumption.
The inclement weather particularly affected demand for air conditioning and cooling, which accounts for the bulk of electricity use in the commercial and residential segments.
‘Unlike commercial, bulk of the power requirements is really on cooling. So, if colder ang weather and impeded ang mobility ng customers nila so less ang requirement ang cooling power,’ Geluz said. ‘And that goes the same with residential.’
As of end-September, Meralco’s consolidated energy sales stood at 40,719 gigawatt-hours (GWh), virtually flat compared to 40,872 GWh a year ago.
The commercial segment, which contributed 37 percent of total sales, recorded 15,237 GWh in the nine-month period, nearly matching last year’s 15,261 GWh.
Growth was held back by ongoing real estate vacancies, weaker hotel demand due to fewer foreign tourists, and frequent heavy rains that caused class and work suspensions, reducing air conditioning use in consumer-facing businesses.
The residential segment accounted for 36 percent of total sales and declined slightly to 14,520 GWh from 14,758 GWh year-on-year, mainly due to a 0.52°C temperature drop and unpredictable third-quarter weather during the transition to La Niña that caused outages.
The industrial segment, however, grew to 10,852 GWh from 10,743 GWh, driven by strong demand in semiconductors and construction-related sectors.
‘Positive effect’
Despite the volume shortfall in the distribution business, Meralco remains committed to its P50-billion core earnings guidance for the year.
Meralco SVP and CFO Betty Siy-Yap said the company is relying on contributions from its power generation portfolio to offset any distribution utility shortfall.
‘We’re relying also on the contribution of power generation which has helped us cover any DU shortfall,’ Siy-Yap said. ‘Although overall we’re also looking at contributions from our subsidiaries. No matter how small it is, it still provides positive effect.’
The company is also implementing prudent cost management measures to cover for any shortfall from the volume effect, she added.
Meralco reported on Monday its consolidated core net income (CCNI) grew 14 percent to P40 billion in January to September from P35.1 billion in the same period last year. Consolidated reported net income went up by 9 percent to P36.8 billion from P33.8 billion.
Consolidated revenues rose 5 percent to P371.8 billion, driven by higher pass-through generation and transmission charges, improved revenues from power generation’s participation in the reserve market, and increased sales volume from retail electricity.