MARKET HEADLINE: SHORT SELLING BY OCTOBER

Manila Electric Company
#1
BUSINESS PROFILE

Incorporated in 1919, Manila Electric Company (MER) is engaged in the distribution and sale of electric energy through its distribution network facilities covering 50 franchise areas in Metro Manila and in six surrounding provinces. The principal sources of power of MER include the National Power Corporation, First Gas Power, Quezon Power Philippines, Wholesale Electricity Spot Market, AES Corporation (MASINLOC), and Therma Luzon, Inc., AP Renewables, Inc., San Miguel Energy Corp., D.M. Consunji (Calaca), Philippine Power and Development Company, and Montalban Methane Power Corp.

On October 20, 2008, the Energy Regulatory Commission granted MER a consolidated Certificate of Public Convenience and Necessity for the operation of electric service within its franchise coverage, effective until June 28, 2028, to coincide with its congressional franchise.

MER's subsidiaries are Meralco Industrial Engineering Services Corporation, Corporate Information Solutions, Inc., Rockwell Land Corporation, Meralco Energy, Inc., e-Meralco Ventures, Inc., Meralco Financial Services Corporation, Clark Electric Distribution Corporation, Republic Surety and Insurance Company, Inc., Lighthouse Overseas Insurance Company, Limited.

Source: SEC Form 17-A (2009)


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#2
Meralco to build coal plant

THE COUNTRY’S largest power distributor Manila Electric Co. (Meralco) is planning to spend up to $1.2 billion to build a coal-fired plant north of Manila with a maximum output of 600-megawatt capacity this year, a ranking official said.

The power plant is eyed to serve as a busload generator once it comes on stream by 2014 or 2015, Meralco Chief Operating Officer Oscar S. Reyes said during the company’s annual stockholders’ meeting yesterday.

Nearly a third of the project cost will come from company equity while the balance will be funded by borrowings, Meralco Chief Financial Officer Betty C. Siy-Yap said after the stockholders’ meeting.

http://www.bworld.com.ph/content.php?sec...t&id=32292
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#3
Meralco assures reliable service amid tight spending

MANILA, Philippines - Manila Electric Co. (Meralco) assured yesterday a continued reliable service despite lower approved distribution rates for the next three years.

“We will have to work within the approved expenditure levels while maintaining our service commitments to our customers,” said Ivanna dela Peña, Meralco’s head for regulatory management.

The Energy Regulatory Commission (ERC) on June 6 ordered Meralco to collect 6.36 centavos per kilowatthour for the regulatory period 2012 to 2015 which is lower than the prevailing maximum average price (MAP) for the year 2011 of P1.6464 per kwh under the performance-based regulation (PBR) scheme.

The PBR is a rate-setting scheme based on a utility’s quality of service to its customers and allows power utilities like Meralco an annual adjustment on its tariffs to take into account inflation and foreign currency exchange fluctuations, as well as its obligations to its franchise area.

The ERC’s final determination reduced Meralco’s combined distribution, supply, and metering rates to P1.5828 per kwh for regulatory year 2012 (which will cover the period July 2011 to June 2012).

According to the ERC ruling, Meralco’s rates will then remain stable for the remainder of the third regulatory period, which will be up to June 2015.

ERC’s final determination came after 11 months of regulatory scrutiny and public hearings.

The ERC approved a P37.2-billion capital expenditure program for Meralco for the third regulatory period, or from July 2011 to June 2015.

http://www.philstar.com/Article.aspx?pub...eId=694938
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#4
Possible block sale today of 230k@278...Heart
"The gut-feel of the 55-year old trader is more important than the mathematical elegance of the 25-year old genius."
-Alan Greenspan-
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#5
Rate limits cramp Meralco capex plans

DISTRIBUTION UTILITY Manila Electric Co. (Meralco) will have to review its spending plans for the next four years after regulators imposed lower rate ceilings for the period, a ranking official said.

“The challenge for us is how to be able to live within that [capital expenditures approved] and that will require reviewing everything or seeing how we can defer some of these capital projects and to continue to grow our profitability,” Mr. Reyes said.

He added the company will have to study its projects again to determine which should be prioritized. The company had planned to spend at least P45 billion over the four-year period for substations, transformers and upgrading of its facilities, he said.

The Energy Regulatory Commission (ERC) decided to peg the Meralco rate ceiling at P1.5828 per kilowatt-hour (kWh) in 2012, a figure which will fall to P1.5817/kWh in 2015 last week.

This is lower than Meralco’s petitioned maximum average prices of P1.7056/kWh in 2012, P1.7686/kWh in 2013, P1.8349/kWh in 2014, and P1.9036/kWh in 2015.

The petitioned rates were based on Meralco’s assumptions of capital spending worth P11.1 billion for 2012, P9.75 billion for 2013, P9.24 billion for 2014 and P8.51 for 2015.

The ERC, however, approved lower capital expenditure allotments.

Mr. Reyes said he cannot give a projection on how the lower approved rates will affect the company’s profits.

He clarified, however, that Meralco will push through with its investments in power generation despite the lower capital spending ceilings.

Meralco had said it wanted to build a coal power plant that will supply base load to the grid.

“The power plant project is separate and is stand alone. They’re distinct and separate from the distribution utility,” Mr. Reyes said further.

Meralco said its net income for the first quarter went up by 6% to P2.1 billion from P2 billion in the same period last year despite lower average pass-through costs and energy sales.

Consolidated core net income grew by 64% to P3.2 billion in the first quarter from P1.98 billion.

http://www.bworld.com.ph/content.php?sec...s&id=33166
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#6
Meralco remains bullish despite lower rates

EXPANSION of distribution utility Manila Electric Co. (Meralco) into adjacent franchise areas will not be affected by lower revenue ceilings, a company official said.
“[The approved lower rates] won’t affect our plans because the areas we are hoping to bring our service to, if we are welcome, are areas with their respective rates,” said Meralco Chief Operating Officer Oscar S. Reyes in an interview.

“So if a particular area allows us to operate at the rate that had been approved, we’re not integrating these areas into our franchise,” he added.

The Energy Regulatory Commission (ERC) earlier approved lower maximum average prices for Meralco, starting with a rate of P1.5828 per kilowatt-hour (kWh) in 2012, up to P1.5817/kWh in 2015.

Meralco’s petition requested for maximum average prices to be at P1.7056/kWh in 2012, P1.7686/kWh in 2013, P1.8349/kWh in 2014, and P1.9036/kWh in 2015.

Meralco earlier said it wants to offer its expertise in power distribution to other areas as a means of expanding its services.

The utility has had to reevaluate its capital expenditure projects for the third regulatory period due to the lower approved ceiling rates. Meralco said it will reprioritize its projects to see which ones will be built with lower capital expenditures. Its power generation projects however are unaffected by the lower rates because capital expenditures for the power plants are different and do not need prior ERC approval.

Meralco’s net income for the first quarter of 2011 went up 6% to P2.1 billion from P2 billion in the same period last year. -- Emilia Narni J. David

http://www.bworld.com.ph/content.php?sec...s&id=33493
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#7
June 22, 2011 - Philippine Stock Market Update

The market extended its gain by 33.47 points or 0.79% to end the day at 4,245.28. The PSEi stayed in positive territory throughout the session, trading in line with most Asian markets. All sub‐indices posted gains with advancers beating decliners 94 to 40 while 43 counters were unchanged. Value turnover was relatively hefty at P4.8b, inclusive of crosses worth P1.28b. Index heavy weight TEL led all index movers, contributing 7.2 points to the overall index gain. It advanced 1.21% to close the day at P2,350. Consumer stock URC topped all index gainers as it rose 5% to P42. Bucking the trend was utility firm MER, losing 1.5% to P263. At the Philippine Dealing System, the peso slightly strengthened and traded at P43.402/US$ during midday against yesterday’s close of P43.460/US$.

Utilities sector Manila Electric Co: Upgraded to HOLD on higher price target
http://www.investorluranski.com/2011/06/...arket.html
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#8
AP, EDC and FGEN except MER. These companies should benefit from higher volume sales, driven by higher demand and capacity expansion. AP’s Ambuklao hydro plant should be operational within the year, adding around 52.5 MW in attributable power generation capacity to AP. EDC should also benefit from the completion of the plant rehabilitation of BacMan, Palinpinon and Tongonan. These power plants should add around 142 MW in new capacity. While MER should also benefit from plans to expand into the power generation sector but its current valuations to be fully valued thus its a HOLD rating.

http://www.investorluranski.com/2011/06/...arket.html
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#9
Meralco buys Aboitiz unit for coal plant

MANILA ELECTRIC Co. (Meralco) has moved to acquire a controlling stake in the Aboitiz Power Corp. unit that is building a 600-megawatt coal-fired plant in Zambales, disclosures filed with the local bourse showed.


MANILA Electric Co. yesterday said its board has decided to acquire a majority stake in the firm in charge of developing a 600-megawatt coal plant in Subic. -- Jonathan L. Cellona
Meralco said its board yesterday decided to take over Redondo Peninsula Energy, Inc. (RP Energy) from Aboitiz Power and Taiwan Cogeneration International Corp. without specifying the purchase price.

“It is envisaged that the Meralco Group will have a majority ownership interest in RP Energy while Aboitiz Power and Taiwan Cogeneration International will be diluted equally and have a combined holding of less than 50%,” the distribution utility said.

RP Energy has the development rights over the coal-fired power plant planned to rise at the Subic Bay Freeport Zone. The planned acquisition falls in step with Meralco’s plans to start building a 1,500-megawatt (MW) power generation portfolio starting with a 600-MW base load plant and a 150-MW peaking plant by 2014.

The deal with RP Energy’s owners will be sealed “in the next few weeks,” Meralco said.

In a separate disclosure, the utility divulged plans to borrow P5 billion by issuing notes to bankroll corporate spending.

The fund-raising will involve P4.5 billion worth of fixed-rate notes due by 2021 and P500 million due by 2018.

Meralco had said it intends to build a 1,500-MW power generation portfolio to take advantage of the projected 11,900-MW supply gap in Luzon that could be seen by 2020.

Reported net income of Meralco for the first quarter went up 6% to P2.1 billion from P2 billion in the same period last year despite lower average pass-through costs and energy sales. Consolidated core net income grew by 64% to P3.2 billion in the first quarter from P1.98 billion.

Shares in Meralco closed at P275, up 1.55% from its previous close of P270.80 a piece. Shares in Aboitiz Power closed at P30.60, up 0.49% from its previous close. -- ENJD



Source: Business World


http://www.bworldonline.com/content.php?...t&id=33772
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#10
[Image: mer-7-18-11.jpg]
MANILA ELECTRIC COMPANY (PSE:MER) - Potential Bearish Gartley

http://pseharmonics.wordpress.com/2011/0...h-gartley/
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