First Gen profit down on lower electricity sales

Posted at 05/16/14 1:28 PM

MANILA, Philippines – First Gen Corp. on Friday said its net income attributable to equity holders of the parent dropped 23 percent in the first quarter of this year due to lower electricity sales.

The Lopez-led power generation firm reported that its net income attributable to equity holders of the parent dropped to $42.9 million for the first three months of the year from the $55.9 million registered in the same period last year.

The company attributed the loss to lower earnings booked by Energy Development Corporation (EDC) as a result of higher operating expenses due to the effects of typhoon “Yolanda” and the revenue adjustment of its subsidiary, First Gen Hydro Power Corporation, due to the adjustment of Wholesale Electricity Spot Market (WESM) prices for November and December 2013 billings.

On a recurring basis, net income attributable to the parent was down 22.7 percent to $42.3 million due to the lower recurring income contribution of EDC and higher interest expenses.

First Gen's consolidated revenues from electricity sales were also down 7.6 percent to $457.0 million for the first quarter of 2014 from $494.6 million for the same quarter last year.

Combines revenues from the firm’s natural gas-fired plants were 8.8 percent lower from the previous year’s $324.3 million due to lower dispatch, lower average gas prices, and lower electricity generation.

The decreased electricity production was due to the damage incurred by Santa Rita’s Unit 40 transformer.

Despite the lower net income in the first quarter, First Gen president Francis Puno said the company remains optimistic about the remaining part of the year.

“EDC restored Unified Leyte to its pre-Yolanda levels last March, while BacMan Units 1 and 3 are currently operating. Later in the year, we expect BacMan Unit 2 to resume its operations and to have the Nasulo geothermal power plant deliver an incremental ~20 MW. Several projects are also lined up in the immediate term, which include the now 150 MW wind farm in Burgos, the 100 MW Avion and the 414 MW San Gabriel natural gas projects,” he said.

In a separate disclosure, EDC reported its consolidated recurring net income attributable to equity holder’s of the parent fell 14 percent to P2.2 billion for the first three months of 2014. This was attributed to
Yolanda-related expenses, which were partially offset by higher
revenues coming from the commercial operations of Bacman Units 1 & 3.

EDC said consolidated revenues reached P7.1 billion in the January to March period, slightly up from the P6.9 billion a year-ago.

“With the return to service of our Leyte plants, our revenue streams for the balance of the year have normalized. More importantly, we expect additional electricity sales from the on-time commissioning of EDC growth projects programmed for the balance of 2014”, EDC President and COO Richard B. Tantoco said.