First Gen H1 net income up 35% to P6.11 billion

By Lenie Lectura – August 14, 2018
from Business Mirror

THE Lopez-led First Gen Corp. (First Gen) on Tuesday posted a 35-percent increase in net income of $115 million (P6.11 billion) from $85 million (P4.516 billion) recorded in the same period last year. The company attributed the increase to equity holders of the parent due to higher earnings from its gas plants.

First Gen operates the 1,000-megawatt Santa Rita gas plant, the 500-MW San Lorenzo, the 420-MW San Gabriel and the 97-MW Avion. Its natural gas platform delivered recurring earnings of $88 million (P4.5 billion) at end-June as against $51 million (P2.709 billion) in the same period last year.

“The natural gas platform’s performance offset the soft performance of the other platforms. First Gen’s strong numbers were likewise boosted by lower interest expenses as a result of the company’s deleveraging initiatives,” First Gen said in a statement.

Revenues from the sale of electricity hit $939 million (P49.894 billion), up 10 percent from $854 million. It said that natural gas portfolio accounted for $599 million, or 64 percent of First Gen’s total consolidated revenues. Their revenues were 22 percent higher in the first half of 2018 mainly due to higher volume sales and spot market prices.

“The gas portfolio thrived during this period, especially San Gabriel and Avion that have been able to achieve remarkable turnarounds this year as they delivered much-needed power to the grid. For the second half of 2018, San Gabriel shifts to being a contracted provider of electricity to Meralco, allowing it to achieve stable earnings. This contract proves the price competitiveness of natural gas-fired power versus coal-fired power even at baseload and more so at mid-merit levels of dispatch,” First Gen President Francis Giles Puno said.

Energy Development Corp.’s (EDC) geothermal, wind and solar revenues accounted for $291 million, 31 percent of total consolidated revenues.

From $318 million in the first six months of 2017, EDC’s revenues declined by 8 percent, mainly due to the damage sustained by Unified Leyte and Tongonan plants resulting from the typhoon in December 2017. This was mildly offset by the higher dispatch and selling prices of its other plants.

Separately, EDC said it will enter into a memorandum of agreement with the Department of Environment and Natural Resources (DENR) to participate in the rehabilitation of Boracay island.

EDC, through BINHI, its flagship environmental program, has committed to adopt wetland number 2, a 7.79-hectare area where only native trees will be planted and grown and an arboretum of native trees will be put up. The wetland is located in Barangay Balabag.

The BINHI program does not just reforest EDC’s geothermal sites. It has also undertaken the task of propagating 96 priority threatened native species.

Aside from the seedlings that will be planted in the wetlands, EDC plans to build an information center for visitors of the wetland and a bird watch platform to allow visitors to view the birds and bats that have been sighted in the area.

EDC is the world’s largest vertically integrated geothermal company and the only diversified renewable energy firm in the country, with an installed total capacity of 1,456.8 MW of purely renewable energy.

FG Hydro, owner of the 132-MW Pantabangan-Masiway hydroelectric plants, reported a seven-percent  decrease in revenues to $23 million due to the absence of ancillary service sales in the first quarter of 2018.

The hydro plants accounted for only 3 percent of First Gen’s total consolidated revenues.

“EDC and FG Hydro are expected to perform better in the second half of 2018 as they both have recovered from each of their respective setbacks. EDC’s Leyte site is back to pre-earthquake and typhoon levels, while FG Hydro has resumed selling ancillary services since end-March of this year,” Puno said.

The company said it reports operations in US dollars since the company is paid in US dollars.