Manila Electric (MER) Q2 2026 earnings summary

Executive summary

• Core net income increased 3.8% to PHP 26.5 billion, with reported net income up 11% to PHP 26.3 billion, reflecting resilience amid volatile energy markets and a diversified portfolio.

• Core EBITDA rose 11% to PHP 44.8 billion, while system-wide power sales volume reached 34,328 GWh, despite a 0.5% decline in distribution utility sales.

• Power generation core net income grew 11% to PHP 10.5 billion, now 39% of total, driven by LNG and renewables.

• Major milestones included the inauguration of MTerra Solar Phase 1 and energization of the Toledo BESS.

• Interim cash dividends of PHP 11.758 per share were declared, representing a 50% payout of core EPS.

Financial highlights

• Consolidated revenues increased 16% to PHP 283.7 billion, driven by higher generation, transmission, and RES revenues.

• Purchased power costs rose 19% to PHP 220.5 billion, representing 86% of total costs.

• Core earnings per share increased 4% to PHP 23.516; dividend per share was PHP 11.758, with a 4.1% yield.

• Operating expenses were PHP 21.6 billion, down 1% year-on-year due to cost management.

• Net debt to EBITDA ratio stood at 1.4x, indicating strong financial flexibility.

Outlook and guidance

• Distribution volumes are expected to grow 2%-2.5% for full year 2026, with July volumes already up 6.4%-7%.

• Generation segment outlook is positive, with full-year operations of LNGPH and COD for Terra Solar expected to drive further growth.

• Regulatory approval for interim extension of a key PPA is expected to yield PHP 4.25 billion in customer savings in 2H 2026.

• Management remains cautious due to regulatory uncertainties, including potential changes to system loss recovery and VAT on electricity.

• Ongoing investments in clean energy and network reliability are expected to support long-term growth and energy security.