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Monday, October 23, 2017 | MANILA, PHILIPPINES
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Date posted: Friday, December 11, 2015 | Manila, Philippines

Electricity, gas and water

Power sector cools off

THE COUNTRY'S power sector woes came to the fore in 2014, as Mindanao suffered a deficit in reserves.

STEAG State Power, Inc., which supplies a fifth of the island-region’s electricity requirements, exemplified the industry’s difficulties. The company suffered delays in the resumption of its two 105-megawatt (MW) generating sets after they sustained heavy damage.

As a result, STEAG Power’s gross revenue dropped 9.9% to P4.54 billion, pulling the company down by 25 notches to 450th place in this year’s Top 1000 Corporations.

The electricity sector tempered its growth in 2014, with the aggregate revenue of 49 companies in this year’s list almost flat at P744.90 billion. Data from the Philippine Statistics Authority showed that gross value added (GVA) grew by 2.08% to P196.52 billion in 2014, slowing from the 5.04% in 2012 and 3.75% in 2013.

Power consumption also eased last year, with electricity sales of 63,345 gigawatt-hours, up by 2.89% year on year, but easing from the 5.55% increment in 2012 and the 3.98% the year after.

Most of the top-grossing energy companies registered weaker performance in 2014, with last year’s top-ranked Manila Electric Co. slipping to the second spot after gross revenue fell 11.4% to P261.23 billion.

Revenues of National Grid Corporation of the Philippines, which ranked 29th, hardly grew, while those of South Premier Power Corp. (35th) rose 4.1%.

The combined earnings of power companies in the Top 1000 Corporations, however, improved, rising by more than a fifth to P141.02 billion.

Having said this, the outlook for the power sector is unlikely to improve dramatically in the near term. Aboitiz Power Corp. or AboitizPower (118th), which controls STEAG Power, expects an oversupply in Mindanao by 2018 and in Luzon by 2020. AboitizPower plans to invest $500 million on opportunities in Southeast Asia, mostly in Indonesia where the company will take part in a 127-MW hydropower project and the exploration and development of a 110-MW greenfield geothermal plant.

Water utilities also are struggling with growth. Manila Water Co., Inc. (105th) saw its revenues dip 11.7% to P17.99 billion, pulling net income down by 3.8% to P5.24 billion.

Gross revenues of Maynilad Water Services, Inc. (74th) increased by 1.3% to P22.46 billion, whereas earnings rose a faster 20.8% to P8.27 billion.

The water sector’s GVA rose 5.72% to P21.88 billion, while output of the steam industry rebounded with an 11.69% surge to P11.15 billion from a 0.34% decline in the prior year. Overall, the output of the utilities sector increased 2.84% to P229.56 billion.

In the first half of 2015, the utilities sector had grown 4%. But its rebound is likely to be short-lived amid the El Niño dry spell, which is expected to last until mid-2016. Rotating brownouts again loom in Mindanao, which relies on the Agus-Pulangi hydropower complex for more than half of its electricity requirements.


*Send e-mail to 'Joch' at jbgonzales@bworldonline.com or follow her on Twitter @jochebedgon.

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