and ESG Highlights
To our fellow stakeholders,
In 2022, the world turned the tide against the COVID-19 pandemic, allowing us to reclaim most of our pre-pandemic lives. However, the year also came with major geopolitical shocks, including the war in Ukraine, which has caused—in large part—global inflation, energy insecurity, supply chain vulnerabilities, and food shortages. It was a test of our persistence, creativity, and resilience—and we are pleased to share that we have emerged from such a challenging and eventful year with new highs.
After an unsteady 1st quarter caused by the Omicron surge, Meralco experienced an upward trajectory in demand as businesses recovered and restrictions were eased on commercial and social activities. As the Philippine economy posted an outstanding 7.6% GDP growth for 2022, Meralco’s total revenues rose 34% to a record high PhP 426.5 billion, reflecting higher volumes and inclusive of pass through generation charges. One Meralco’s consolidated core net income grew by 10% to a record high PhP 27.1 billion. Our enhanced profitability in 2022 was driven in part by significant improvements in MGen, our power generation business, on the back of the strong performance of PacificLight Power Pte. Ltd. and San Buenaventura Power Ltd. The PhP 5.4 billion from MGen is an impressive 346% increase versus previous year. Reported net income improved 21% to its highest ever level at PhP 28.4 billion.
To further future proof our business, we increased our capital investments by 55% to PhP 42.6 billion to cover power generation projects, upgrade distribution facilities, improve customer service, build our network, strengthen our fiber backbone, and invest in the tower business. Noteworthy is our infrastructure unit MIDC’s sale and leaseback agreement with Globe Telecom Inc., for the acquisition of 2,180 towers and passive telecom infrastructure worth PhP 26.2 billion. Completion of the tower transfers is projected to occur in the coming months.
Apace with our financial gains was the enhanced operational performance of our distribution business. The economy found new life as government rolled back certain pandemic policies, including the lifting of mandatory face masks and presentation of vaccination cards, as well as the resumption of onsite work and school activities. Energy sales breached pre-pandemic levels with the increase in mobility and economic activities. We expanded our customer base by 3% ending 2022 with 7.6 million customers, which translated to a 6% increase in energy sales, highest ever at 48,916 GWh.
While we made it through this brief economic winter, we recognize our vital role in preventing similar catastrophes. Meralco is uniquely positioned to contribute to the achievement of the UNSDG* 7: Affordable and Clean Energy, enabling us to continue powering cities and communities while preserving our planet, empowering our people, and creating prosperity for all—the hallmarks of our sustainability agenda, Powering the Good Life.
Manuel V. PangilinanChairman
Ray C. EspinosaPresident and Chief Executive Officer
Meralco delivers profitable growth for its shareholders through our five growth platforms and by focusing on key business imperatives. Meralco brings reliable and affordable energy to customers across all segments. In 2022, we touched more lives and industries as Meralco reached 7.6 million customers. This is a 3% increase from 2021’s 7.4 million when electricity consumption in the Meralco franchise area already represented more than 50% of the country’s total electricity consumption. This record number of end-users, coupled with overall higher demand, pushed distribution volume up by 6%, delivering 48,916 GWh of electricity at an average retail rate of PhP9.52 per kilowatt-hour. As a result, Meralco’s electricity sales revenue went up to PhP426.5 billion, demonstrating a noteworthy 34% increase from PhP309.2 billion in the preceding year. To deliver this, Meralco leveraged its various forms of capital to continuously connect more customers to the grid, boost its hiring and technical capacity, and enhance and digitize its business processes.
In 2022, One Meralco Foundation (OMF), Meralco’s CSR arm, aided marginalized communities’ recovery through electrification, sustainability, and community initiatives, providing electricity access and support driven by the value of Malasakit.
Through the household electrification advocacy, Meralco assisted 6,376 low-income families in its franchise area to obtain access to the distribution grid.
Meralco expanded the “One for Trees” (OFT) program to the rest of the country through partnerships with grassroots peoples' organizations. By the end of 2022, OFT has planted and nurtured 1.8 million trees.
Meralco implemented 228 community relations projects in partnership with public schools, local governments, other national government agencies, private organizations, and non-government organizations (NGO) as well as civil society and peoples' organizations in 2022.
Commercial sectors showed strong double-digit growth, while retail, hospitality, and real estate saw increased demand as operations resumed post-pandemic.
As business and public confidence were rebuilt, Meralco was there to illuminate the path towards a better life for our customers and the communities where we operate.
In the post-COVID "new normal", Meralco embraces the lessons learned from the pandemic and reintegrates value-rich practices from the past. 2022 marked a period of growth in our digital transformation journey.
One Meralco continues to actively transform its business towards becoming a sustainable enterprise. Anchored on its long-term sustainability strategy (LTSS), the Group will drive its just, orderly, and affordable transition to clean energy. Its end goal is to be coal-free by 2050.