First Gen expects profit boost from 2 new power plants next year

MANILA, Philippines - Lopez-owned First Gen Corp. expects improved profits in 2016 as two new power plants  start contributing to the overall business.

“We continue to progress with the construction of the 97-MW (megawatt) Avion peaking plant and the 414-MW San Gabriel mid-merit plant. We expect to commission Avion by year-end and San Gabriel by the second quarter of 2016,” First Gen president Francis Giles B. Puno said.

“We look forward to reporting improved financial performance in 2016 driven by stronger income across our clean and renewable energy platform,” he added.

This year, lower earnings contributions from its geothermal and hydropower plants have been weighing on the company’s financial performance.

In the first nine months of the year, First Gen profits fell 26 percent to $120 million from $163 million it registered in the same period in 2014.

The company said the decline was due to lower earnings contributions from its geothermal and hydro operations, which were partially offset by higher earnings from its natural gas plants.

Recurring net income was also lower at $129 million, a four percent drop from $135 million in 2014.

“We expect to end the year with weaker contributions from our geothermal operations, which will be offset by improved dispatch from the Burgos wind project with the transmission constraint addressed,” Puno said.

For the period, consolidated revenues from the sale of electricity were relatively flat at $1.4 billion.

The Santa Rita and San Lorenzo natural gas-fired power plants accounted for 60 percent of total revenues equivalent to $834 million.

Both plants’ revenues were eight percent lower from $904 million last year due to lower fuel charges, though partially offset by the higher combined dispatch of the gas plants at 81 percent versus last year’s 70 percent.

Lower interest expenses, however, slightly increased the natural gas plants’ earnings contribution to $92 million as of end-September.

First Gen subsidiary Energy Development Corp.’s revenues accounted for $524 million or 37 percent, while First Gen Hydro Power Corp.’s revenues were $35 million, or two percent of total consolidated revenues.

EDC’s revenues rose nine percent from $482 million mainly due to contributions from the 154.16-MW Burgos project, the 49.4-MW Nasulo plant, and the 140-MW Bacon-Manito plant.