Manila Electric Company
cash div : 3.45php/share
ex-date : Aug 12, 2011
payment date : Sept 13, 2011

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Meralco Q2 profit up 39%

(Reuters) — Manila Electric Co. (Meralco), the Philippines’ largest power distributor, posted a 39 percent rise in quarterly profit, helped by higher distribution charges, and expects to grow its core income by 15 percent this year.

Meralco, partly owned by San Miguel Corp and indirectly by the First Pacific Group , said it had net income of 3.96 billion pesos ($93 million) in the June quarter, compared with P2.84 billion in the same period in 2010.

Analysts had expected net income of P3.3 billion for Meralco in the second quarter, according to consensus estimates from Thomson Reuters I/B/E/S.

First-half net income climbed 25.6 percent to 6.09 billion pesos. Core income, which strips out currency and derivatives-related items, climbed 34.7 percent to P7.8 billion.

Meralco, whose power sales are often used by analysts as a barometer of economic activity, said energy sales in the first half fell 1 percent to 14,781 gigawatthours due to cooler weather.

The company said it expects core net income to rise 15 percent this year to P14 billion.

Meralco’s profit guidance assumes electricity sales in the second half would be broadly similar to that in the first six months, said Meralco president and chief executive Manuel Pangilinan.

It also reflects slightly lower distribution charges based on the recent tariff ruling of the Energy Regulatory Commission, he said.

“We see lower core earnings in the second half than in the first. We are, of course, taking initiatives to raise electricity sales in the second half to boost core income for the whole year," Pangilinan said at a news briefing.

Analysts forecast net income of P17.7 billion pesos for the full year, according to consensus estimates from Thomson Reuters I/B/E/S show.

Meralco is looking to build power plants with a total capacity of 1,500 megawatts over the next five years, and may spend an estimated $2.3 billion, to fill an expected increase in power demand in coming years.

It signed an agreement with Aboitiz Power Corp and Taiwan Cogeneration Corp. on Friday to put up a 600 MW coal-fired power plant in the Subic Bay Freeport Zone in Zambales province, north of Manila.

That project, to be funded with debt and equity, will be undertaken by Redondo Peninsula Energy Inc., in which Meralco now has a majority stake. Commercial operation of the plant is expected to start in 2014.

RP Energy is looking to raise P39 billion via a syndicated loan deal with banks to finance the project. — Reuters

Meralco in talks with gencos to boost capacity

MANILA, Philippines - Manila Electric Co. (Meralco) is in talks with power generation companies to boost its generation capacity by 2,400 megawatts.

In a briefing yesterday, Meralco PowerGen Corp. general manager Aaron Domingo said the group is looking to partner with other power generation firms to augment capacity within the Luzon grid by 2014, and provide affordable and reliable power to a broader customer base.

Domingo said San Miguel Energy Corp. is among the companies the group is in discussions with.

Meralco has re-entered the power generation business through the acquisition of a majority stake in Redondo Peninsular Energy Inc., which has the development rights and assets to a 600-megawatt coal-fired power plant in the Subic Bay Freeport Zone in Zambales province.

The Subic coal-fired power plant, which was estimated to cost more than P33 billion, is targeted for commercial operations by 2014.

“Every business we venture into is conceived with the belief that we will make a difference and add to the legacy of the Meralco brand... Our confidence sets us in motion as we prepare for opportunities and keep our commitment to building a sustainable future through pioneering, responsible and environment-friendly power plants,” said Manuel V. Pangilinan, president and chief executive officer of Meralco.

“We build on our milestones in 2010 and see opportunities to provide the reliable power at competitive prices. Our acquisition of a majority stake in RP Energy, whose plants are expected to be running by 2014 is less than a quarter of our aspiration for efficient and reliable energy output. Power generation will drive the growth of Meralco,” he further said.

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Meralco to spend P4.5 B on transformers, substations
By Ted P. Torres (The Philippine Star) Updated August 31, 2011 12:00 AM

the key to trading success is to focus on how much money is at risk, not how much money you can make.

trading is simple, but it's not easy. if you want to stay in the business, leave hope at the door, focus on specific setups, and stick to your stops.
Posted on September 18, 2011 05:40:21 PM
Meralco to try out prepaid scheme

DISTRIBUTION UTILITY Manila Electric Co. (Meralco) will test a prepaid scheme for settling electric bills early next year, the firm said in a statement late last week.
the key to trading success is to focus on how much money is at risk, not how much money you can make.

trading is simple, but it's not easy. if you want to stay in the business, leave hope at the door, focus on specific setups, and stick to your stops.
MVP finalizes Meralco stake consolidation

THE group of Manuel V. Pangilinan has completed the full consolidation of its near-controlling stake in Manila Electric Co. (Meralco) under holding firm Beacon Electric Asset Holdings Inc., taking advantage of the slide in the utility’s share price.

Beacon, a 50-50 venture between listed firms Metro Pacific Investments Corp. (MPIC) and PLDT Communications and Energy Ventures Inc. (PCEV), acquired the remaining 6.1 percent Meralco stake held by PCEV for P15.136 billion, separate disclosures showed on Thursday.

Based on the transaction, Beacon acquired the stake at P220 per share, which was based on a discount on Meralco’s 15-day weighted average, PCEV said.  Meralco shares declined 2.28 percent to P240 each.

This brings Beacon’s ownership in the power retailer to 45.35 percent, further bolstering its status as the single biggest shareholder in the company.  The transaction is expected to close in the “next few days,” an MPIC spokesperson said on Thursday.

To acquire the shares, Beacon will issue 1.199 billion preferred shares to PCEV valued at the acquisition cost. The preferred shares will pay a dividend rate of 7 percent per annum.

“[The transaction]  consolidates the wider group’s shareholdings into Beacon Electric so that both MPIC and PCEV shareholders enjoy the full value of our Meralco investment.”MPIC and Beacon president Jose Ma. K. Lim said in a statement.

The ownership consolidation comes as Meralco ventures into power generation, which is expected to cost up to $2.3 billion involving the creation of 1,500 megawatts of capacity through 2016.

MPIC chief finance officer David Nicol said in a previous interview that Beacon may further increase its ownership in Meralco, although it will be careful not to bring this over 50 percent.

MPIC, a holding firm with interests in toll roads, water infrastructure, hospitals and power, slid 1.63 percent to P3.01 each on Thursday.

 PCEV, a former telecommunications provider with a public float of 0.5 percent, did not move at P5.95 each. MPIC and PCEV are units of Hong Kong-listed conglomerate First Pacific Co. Ltd., where Pangilinan is also chief executive officer and managing director.

October 31, 2011 | Manila, Philippines

Stock Pick
Manila Electric Co. (MER)

Recommendation: Wait to buy

AB CAPITAL Securities, Inc. has placed a “wait to buy” tag on shares in Manila Electric Co. (Meralco), saying the stock’s price is still high.

“Investors should wait for lower prices before buying stocks from Meralco. Hopefully, the stock’s price would dip,” analyst Maria Arylsa E. Narciso said.

Meralco shares ended the week unchanged at P242 apiece. Ms. Narciso placed the stock’s support at P240, adding that a good entry-point would be at around P235 per share. She pegged the stock’s resistance at P252, and price-to-earnings ratio at 21 times.

“Meralco stocks, from a long-term perspective, are still good,” the analyst said.

The country’s biggest power company has reported that it sold 7,710 gigawatts per hour in the third quarter, adding that it expects to match its power sales last year. Meralco recorded a 26% increase in net income in the first half of 2011, to P6.09 billion from P4.9 billion. — Thomas David F. Alejandria
the key to trading success is to focus on how much money is at risk, not how much money you can make.

trading is simple, but it's not easy. if you want to stay in the business, leave hope at the door, focus on specific setups, and stick to your stops.

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