Energy giant Manila Electric Co. grew first quarter profit, but the shift is clear. Power generation is now nearly matching distribution as an earnings driver, offsetting weaker demand and rising costs.
Revenue rose 5 percent to P120.8 billion from P115 billion, while reported net income increased 4 percent to P10.8 billion from P10.4 billion. Core net income edged up 2 percent to P11.4 billion from P11.2 billion.
Management’s view
“Our [distribution utility] business has been focused on ensuring continued delivery of safe, reliable and affordable power across our network, and has undertaken a comprehensive review of our fuel supply mix. We will continue to pursue prudent sourcing strategies to manage our exposure to price volatility,” said Meralco chair and CEO Manuel V. Pangilinan.
“Our power generation business is likewise actively managing its power plant portfolio and has been supporting supply security by fast-tracking the development of its projects, particularly MTerra Solar, which has been steadily increasing its capacity and boosting available capacity in the Luzon grid,” he added.
Distribution earnings slowdown
The distribution unit remained the largest contributor, accounting for 46 percent of core net income or P5.3 billion, but volumes fell 2 percent to 12,273 gigawatt-hours from 12,493 gigawatt-hours.
Residential sales declined 3 percent, commercial slipped 1 percent and industrial dipped 1 percent due to cooler weather and rising rooftop solar adoption.
We will continue to take proactive steps to mitigate emerging pressures on both rates and operations, while ensuring supply adequacy especially as we go
through the seasonally critical dry months and face the heightened likelihood of El Niño conditions developing in the coming months,” said Meralco executive vice president and chief operating officer Ronnie L. Aperocho said.
Power generation accounted for 45% of earnings
Power generation contributed 45 percent or P5.1 billion, with earnings surging 51 percent year on year. Output rose 25 percent to 6,626 gigawatt-hours from 5,301 gigawatt-hours, driven by liquefied natural gas assets and expanding renewable capacity.
Retail electricity supply and non-electricity businesses made up 9 percent or P978.4 million, with energy delivered increasing 9 percent to 1,827 gigawatt-hours from 1,676 gigawatt-hours.
"The first quarter of 2026 marks MGEN’s shift from building capacity to delivering tangible impact to the grid. With MTerra Solar now energized, we are not only strengthening today’s energy supply but also demonstrating the Filipino’s ability not only to build big, but also to build fast,” said MGEN president and CEO Emmanuel V. Rubio.
Costs and pricing
Purchased power costs rose 7 percent to P92.7 billion from P86.4 billion. The average retail rate increased 12 percent to P12.39 per kilowatt-hour from P11.06, mainly due to higher generation charges.
Operating expenses rose 1 percent to P10.4 billion from P10.3 billion, reflecting continued cost discipline.
—Edited by Miguel R. Camus
