Napocor sees another break even year in 2006

The National Power Corp. (Napocor) expects to break even again in 2006, its top official said.

"We are hoping that we could maintain our good performance up to next year," Napocor president Cyril del Callar said.

Del Callar said they are confident they will "hit the black for the first time in seven years and the P117-billion net loss will be wiped out this year."

The Napocor chief attributed the improvement in the financial performance to the power firm’s effort to bring down the use of imported fossil fuel.

He said they have also engaged in various schemes to strengthen the company’s financial management.

"We have reviewed our insurance contracts instead of paying long-term, we have shortened it or pay in cash so we will do away with expensive premiums," he said.

According to him, the strengthening of the peso against the US dollar and the Japanese yen also helped in trimming down the company’s losses.

Most of the power firm’s debts are US and yen-denominated.

Napocor vice president for finance Lorna Dy, on the other hand, said all their debts since 1993 was pegged at P56 to a dollar. With the improvement in the forex, Dy said they may even surpass the "break-even projection".

"If the foreign exchange will stabilize further next year, the company’s financial condition will be maintained or improved," Dy said.

She added that they are also committed to continue with their cost-cutting measures to maintain or improve the firm’s financial standing.

The Napocor finance official said her department would present to Napocor’s board, in a meeting before the end of the year, the results for 2005.

In 2004, Napocor recorded a net loss of P29.9 billion.

Since 2001, Napocor has been borrowing about $1.5 billion annually to meet its budgetary shortfall.

"This year 2005, however, we only sourced about $500 million from the financial market because we were able to internally raise, alongside other means, the needed funds for our operations. Napocor is allowed to borrow as much as $1.5 billion a year to meet its financing gap. But this year, we only opted to borrow $500 million," he said.