First Gen net income slid to $167 million in 2015

by Lenie Lectura – March 17, 2016

from Business Mirror

FIRST Gen Corp. (First Gen) of the Lopez group on Thursday posted a 13-percent decline in net income last year to $167 million, from $193 million a year ago.

The decline was mainly attributed to First Gen’s subsidiary Energy Development Corp. (EDC), which contributed lower earnings due to higher operating expenses.

Core profit, meanwhile, increased by 7 percent to $163 million last year, from $153 million in 2014, as the natural gas-fired plants benefited from higher dispatch and lower expenses, as well as lower interest expenses at the parent company. First Gen’s consolidated revenues from the sale of electricity slightly decreased to $1.84 billion in 2015, compared to $1.9 billion in 2014.

The Santa Rita and San Lorenzo natural gas-fired power plants accounted for $1.08 billion, or 59 percent of First Gen’s total consolidated revenues. Their revenues were 11 percent lower in comparison to their contribution of $1.2 billion in 2014 due to lower fuel charges, though partially offset by the higher combined dispatch of the gas plants in 2015 at 81 percent versus 2014’s 70 percent.

In total, the recurring earnings contribution of the natural gas-fired plants increased by $11 million to $118 million in 2015, as the higher dispatch was supplemented by lower interest expenses.

Meanwhile, EDC‘s geothermal, wind and solar revenues accounted for $709 million, or 39 percent, while First Gen Hydro Power Corp.’s revenues were $42 million, or 2 percent of total consolidated revenues from sale of electricity. EDC’s revenues rose by $57 million, or 9 percent, from $652 million in 2014. The growth was mainly due to full-year contributions from the new wind and rehabilitated geothermal projects.

On a recurring basis, EDC’s operations suffered from lower attributable earnings of $90 million, from $93 million due to higher operating expenses.

“2015 turned out to be a solid year in terms of recurring income. However, our financial results were still below our own expectations driven by the delay in the 97-megawatt Avion and higher expenses incurred at EDC,” First Gen President Francis Giles Puno said.

“In 2016 we look forward to completing Avion and the 414-MW San Gabriel power plants at an opportune time when tightness of supply is forecasted. We will provide clean and lower carbon-sourced energy to the market at competitive rates.”