EDC earnings rise 7% in six months

MANILA, Philippines - Higher electricity sales and lower operating expenses helped Lopez-led geothermal and wind energy company Energy Development Corp. (EDC) register an increase in its six-month net earnings.

EDC disclosed its consolidated net income, inclusive of non-recurring items, went up seven percent from P4.61 billion in the January to June 2015 period to P4.91 billion in the same period this year.

“The increase was primarily driven by higher revenues from power projects and lower operating expenses,” it said.

Revenues improved from P16.78 billion to P17.01 billion on the back of improved sales resulting from plants with large contracted capacities.

These plants include Tongonan/Palinpinon geothermal plant on account of lower unplanned outages, Pantabangan-Masiway hydroelectric plant due to higher water levels in the dam, and Burgos wind and solar farms following the resolution of its curtailment issues after the completion of the Laoag-San Esteban transmission line.

Meanwhile, plants that were exposed to the spot market such as Bacman and Nasulo geothermal plants recorded lower revenues despite an increase in sales volume.

“In spite of the low WESM price environment, we remain committed to address plant reliability issues fleet-wide,” EDC senior vice president and CFO Nestor Vasay said.

“Investing in the company’s existing asset base is expected to boost cash generation, with the equipment’s improved reliability and output,” he said.

Operating expenses, on the other hand, dropped by P710 million with the deferral of non-critical projects and the curtailment of business related expenses.

As of the first half of 2016, EDC’s financial position remained strong with cash balance of P15.58 billion while maintaining a comfortable gearing level with consolidated net debt to equity of 1.15 to one and consolidated net debt to EBITDA of 2.89 to one.