Philippines' TransCo end-2005 net asset value P149B

The National Transmission Corp. (TransCo) has a net asset value of P149 billion as of end-2005, according to independent consultancy firm Sinclair Knight Merz. The appraisal is crucial to stir up investor interest in the next round of bidding for TransCo's privatization set this September. Based on TransCo's 2005 annual report, its total assets reached P185.5 billion, an increase of P52 billion or 39 percent over 2004, mostly due to the revaluation of assets which was conducted by Sinclair. The results of the revaluation were taken up in the books following the approval of the Sinclair report by the TransCo and Power Sector Assets and Liabilities Management Corp. (PSALM) boards. The revaluation result was used by TransCo in determining its annual revenue requirement, maximum allowable revenue and effective transmission charges for the second regulatory period of 2006-2010. The asset revaluation was in compliance with the requirements of the transmission wheeling rates guidelines of the Energy Regulatory Commission (ERC). Net cost of assets used in operations accounted for 80.3 percent of the total assets. The cost of uncompleted transmission lines, substations and other improvements was recorded at P20.09 billion or 10.8 percent of the total assets. For the period under review, TransCo’s current assets were reported at P14.59 billion. Power receivables accounts for 65 percent of these assets at P9.44 billion, consisting of collectibles for P3.04 billion transmission delivery service; P6.37 billion ancillary services and P29 million universal charge. Total receivables from Manila Electric Co. (Meralco) amounted to P6.37 billion, 67 percent of which or P4.28 billion pertained to its overdue ancillary services accounts due to shortfall from its contract with the National Power Corp. (Napocor) from Sept. 26, 2002 to Oct. 25, 2004 plus imbalance charges. The rest of the current assets consisted of P3.48 billion supplies for operation and cash and other assets of P1.66 billion. The P454 million deferred charges generally consisted of preliminary survey and investigation costs of transmission projects. As of end-2005, the company’s net utility revenue improved by 0.3 percent to P24.29 billion from 2004’s P24.22 billion. Total operating expenses was contained at P8.08 billion, lower by P994 million or 11 percent from a year-ago level of P9.07 billion. The net operating income for the year under review is recorded at P16.2 billion, higher by 7.1 percent or P1.07 billion than the previous year's level. Net other income inclusive of interest was higher than the previous year’s level by P123 million, as a result of higher Economic Processing Zone Authority (EPZA) management fee, interest income revenue from liquidated damages and purchase discounts. The company's cash flows from operating revenues and interest, rental and miscellaneous income amounted to P24.26 billion, P228 million higher thatn the net cash flows from operation in 2004. Total expenditures for operating activities were recorded at P4.46 billion or 20.7 percent decrease from a year ago level of P5.6 billion. Disbursements for personal cost and maintenance and other operating expenses (MOOE) amounted to P4 billion while P461 million was spent for interest, tax and other expenditures. - GMANEWs.TV