Q2 2026 Manila Electric Co Earnings Call Transcript
Key Points
- Consolidated core net income (CCNI) grew 3.8% to PHP27.4 billion in H1 2026, demonstrating resilience amid a challenging energy environment.
- Power generation business saw an 11% increase in CCNI contribution to PHP10.5 billion, driven by full operations of LNGPH and higher energy sales.
- MTerra Solar Phase 1 was inaugurated, becoming the world's largest integrated solar and battery facility, with 1,373 MW solar PV and 825 MW BESS energized.
- Customer base grew 2.2% to 8.306 million, and peak demand hit an all-time high of 9.39 GW, up 5.9% year-on-year.
- Service reliability improved significantly, with SAIFI down 11% and SAIDI down 8%, while average time to connect customers improved by 6%.
- The company maintained a healthy balance sheet with a net debt-to-EBITDA ratio of 1.4x and declared an interim dividend of PHP11.758 per share, implying a yield of approximately 4.1%.
- Consolidated DU energy sales declined 0.5% year-on-year to 26,967 GWh, impacted by cooler weather and energy conservation measures.
- Average electricity retail rate increased 15% to PHP13.09 per kWh, driven by higher generation, transmission, and FIT-All charges, which could pressure consumer demand.
- Power generation CCNI contribution in Q2 2026 declined 11% year-on-year due to outages at PEDC 3 and Sarangani, as well as line rental hits from LNGPH.
- The proposed removal of system loss charges by the government, if enacted, could materially impact earnings, though it requires EPIRA amendment.
- Regulatory uncertainty persists, including delays in the tariff reset decision (expected September or October) and pending approval for the 900-MW baseload CSP.
- Higher costs from increased fuel prices, peso depreciation, and higher WESM charges have pressured margins, with purchase power costs up 19%.
(video playing)
Good afternoon investors, analysts, fund managers and value stakeholders. Welcome to Meralco's first-half 2026 financial operating results briefing. I am PJ Ramos, Chief Investor Relations Officer of Meralco, and I will be your moderator for today's session.
We are pleased to have you as a participant joining both in person via MS Teams, and we thank you for taking the time to be with us today. Before we begin, please take note, this session is being recorded. Kindly observe the ground rules that were circulated prior to this meeting.
Today, we will walk you through Meralco's performance for the first half ended June 30, 2026. The presentation materials are available on our website under the Investor Relations section.
Joining us today are members of the Meralco's management team, Mr. Ronnie Aperocho, Executive Vice President and Chief Operating Officer; Ms. Betty Siy-Yap, SVP and Chief Finance Officer; Mr. Emmanuel Rubio, President and CEO, Meralco PowerGen; Atty
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