First Gen income up 19% in H1

MANILA, Philippines - Higher earnings contributions from its natural gas and hydropower plants helped led First Gen Corp. boost its net profits by a fifth from January to June this year.

First Gen reported a net income of $113 million for the first semester, up 19 percent from $95 million last year as its natural gas and hydro portfolios delivered higher earnings.

The company received liquidated damages caused by the construction delay of the San Gabriel power plant, driving earnings of the natural gas-fired plants to $82 million. Its subsidiary, Energy Development Corp. (EDC), contributed flat earnings at $46 million while FG Hydro contributed higher earnings at $11 million.

On a recurring basis, the company’s core net income was flat at $88 million because the higher dispatch enjoyed by the gas and hydro platforms were offset by lower contributions from EDC mainly because of lower spot market prices.

First Gen also incurred higher interest expense as a result of a new $200 million term loan it obtained in September 2015, weighing on the recurring income for the period.

The company recorded a 16 percent drop in consolidated revenues from $965 million to $804 million.

The First Gas plants, or the 1,500-megawatt (MW) Santa Rita and San Lorenzo natural gas-fired plants, accounted for 55 percent of total consolidated revenues, lower by 25 percent due to lower fuel prices partially offset by the higher combined dispatch of the gas plants at 84 percent from 80 percent.

Supplementing the First Gas plants’ earnings is the 414-MW San Gabriel and 97-MW Avion natural gas-fired power plants, which were on commissioning phase during the second quarter of 2016.

“Given the current tightness in supply as evidenced by the alerts triggered in recent weeks, the timing of the 97-MW Avion and the 414-MW San Gabriel power plants’ commissioning is a positive development. Both plants have already demonstrated the ability to operate and produce power at full (or even above full) capacity, which has benefited consumers as they ease the current supply tightness,” First Gen president and COO Francis Giles Puno said.

Revenues from EDC accounted for 41 percent of total, which came from its geothermal, wind and solar projects.

EDC’s revenues declined six percent from $350 million to $329 million mainly due to lower spot market prices, though partially offset by the higher dispatch of the Tongonan, Palinpinon and Burgos power plants.