by Myrna Velasco – May 15, 2016
from Manila Bulletin
The upswing in sales generated from its 150-megawatt Burgos wind farm had driven up by 7.0-percent the core income of Lopez firm Energy Development Corporation (EDC) in the first quarter to P2.63 billion from last year’s P2.46 billion.
With non-recurring items factored in, the company’s consolidated net income attributable to parent had been 31-percent higher to P3.25 billion in the first three months from P2.49 billion in the same period last year.
In a briefing with reporters during the company’s annual stockholders’ meeting, EDC president Richard B. Tantoco indicated that they are anticipating a “flattish” financial performance this year, although its wind facility may continue to be an income driver.
He added their main focus is navigating and sorting out strategies on how to alleviate the impact of anemic prices in the country’s Wholesale Electricity Spot Market. The company has 15-percent exposure for its portfolios in the spot market.
“The effects of low electricity spot price, while significant, are being addressed by the company,” Tantoco said.
Within January-March stretch this year, the publicly listed firm similarly reported 7.0-percent rise in consolidated revenues to P9.10 billion, up P0.60 billion from the year-ago level of P8.50 billion.
“Increased core income and revenues resulted primarily from higher energy sales being reported by EDC’s Burgos wind project,” the company has emphasized. Core income from this specific project climbed by P0.52 billion.
EDC added that seamless wheeling of generated capacity from the wind farm was attained “following the completion of the uprated Laoag-San Esteban transmission line last September, 2015.”
The company added “revenue results for the balance of the portfolio were partially muted as some of the gains in sales volumes have been negated by lower spot prices.” Increased revenues that were logged came mainly from largely-contracted capacities such as its Unified Leyte and Palinpinon-Tongonan plants.
The company by far posted “lower reported revenues from plant capacities exposed to the spot markets,” such as the Bacon-Manito and Nasulo geothermal plants.
This year will generally be a capital expenditures (capex) injection phase for the planned ‘capacity optimization’ of the company’s existing geothermal assets to improve on their availability and veer away from occurrence of plant outages.
Tantoco expounded “if you will recall, we started deferring capex-intensive growth projects late in 2015 to instead re-focus investments on the existing asset base to boost overall output, reliability and cash generation. We are already seeing some of the gains come in.”