First Gen income dips 4% to $84 M

By Myrna M. Velasco – August 15, 2017, 10:01 PM

from Manila Bulletin

Given the lower dispatch of its gas-fired power plants in some months during the first semester, the recurring net income of First Gen Corporation had been down by 4.0 percent to US$84 million compared to last year’s more favorable financial outcome of US$87 million.

Moreover, its attributable net income had been lower at US$58 million primarily because of the one-time effect of the “break funding costs” incurred for the $500-million long-term debt refinancing of the Sta. Rita gas plant in May this year.

On the company’s overall financial performance over the six-month duration, First Gen President Francis Giles B. Puno said “it was unfortunate that the natural gas plants suffered from lower dispatch in the first half of the year for a variety of reasons.”

Most notable of such hapless events that happened during the period had been the earthquake that affected its power plants in Batangas; as well as the shutdown of the Malampaya gas production facility at the starting months of 2017.

On revenues, the Lopez firm logged an increase to US$851 million during the review period; from US$804 million a year ago. The gas plants, the company said, accounted for 58 percent or US$490 million of the consolidated revenues.

Its hydro portfolio, comprising of the 132MW Pantabangan-Masiway hydroelectric plants, registered decline in revenues by 32 percent to US$22 million.

The Lopez company should have been looking at a better financial picture minus the technical distress that confronted its facilities, with it noting that it was already partly recovering on its spot market price losses, given “higher electricity prices in the Wholesale Electricity Spot Market in the second quarter.”

From a relatively weaker bottom line figure posted in January-June this year, First Gen indicated that it is still “hopeful the dispatch of (its) plants will catch up especially with the higher cost of coal today.”

The Sta. Rita and San Lorenzo plants of First Gen have their capacities contracted by Manila Electric Company (Meralco); while its new plants San Gabriel and Avion are of “merchant nature,” hence, they are largely exposed to the spot market.

Onward, Puno inferred that what they have been trying to show is that “lower carbon and clean gas-fired power from San Gabriel is running reliably and clearly cost-competitive compared to coal plants running 24-hour baseload and cheaper on 12-hour mid-merit operations.”