Vivant keeps modest growth outlook

CEBU, Philippines -  Garcia-led power company, Vivant Corporation maintains conservative growth outlook for this year, despite the soaring demand for power in the country.

During the company's annual stockholders' meeting held yesterday at the Grand Convention Center, Vivant Corporation executive vice president and chief operating officer Arlo G. Sarmiento said the exceptionally competitive environment in power business kept the company to stay within its growth level in 2016, which recorded a 23 percent growth.

The publicly-listed Cebuano power firm also considered the low price cap and declining volatility of the Wholesale Electricity Spot Market (WESM) as few of the reasons why it pinned sticking modest projection this year.

"Low WESM prices are expected to persist. There is currently enough generation supply in Luzon and Visayas demand and no plant retirements are expected in the short term. Declining volatility in the past two years supports this conservative outlook," said Sarmiento.

However, the company initially set aside at least P2 billion capital expenditure (capex) for 2017 to 2018. This is on top of the P4.9 billion the company incurred in 2016 for expansion and additional projects.

In 2016, Vivant Corporation posted a 23 percent year-on-year growth in its net income of P1.3 billion from P1.1 billion the previous year.

According to Sarmiento the power generation business bolstered the company's earnings with P984 million, up by 36 percent year-on-year and accounts for 59 percent of the income contributions from business segments, while the distribution business shored in table earnings of P689 million in 2016 recording a nine percent vis-a-vis the year.

“The difficult environment in 2016 is anticipated to prevail for some time. However, the disruptive trends from competition and changes in governing business rules have also opened up substantial growth opportunities,” reported Sarmiento.

He further reported that the company has invested in projects that involve the construction of power generation plants and will bring total capacity to 400 MW in 2018. This adds 147 MW to its total attributable generation capacity, translating to a 58% expansion from end-2016 level of 253 MW.

Minergy Power Corporation is expected to complete the construction of a 165 MW coal-fired power generation facility in Misamis Oriental in the second half of 2017. The plant will be servicing the power requirements of the franchise area of the Cagayan Electric Power Cooperative.  Vivant’s equity investment in this project amounted to approximately P2.8 billion.

Another project for completion in 2017 is the construction of a 30-MW diesel-fired power generation plant that is being undertaken by 50 percent-owned Delta P, Inc. The output of this facility will address the growing requirements of the Palawan Electric Cooperative via a 15-year Power Supply Agreement. Vivant’s equity investment in this project will amount to approximately P200 million. (FREEMAN)