Aboitiz Power more than doubles recurring income to P2.19 B in H1

Aboitiz Power Corp (APC) more than doubled its recurring net income in the first half of 2008 to P2.19 billion from P926 million in the same period last year, the company said yesterday.

In a disclosure to the Philippine Stock Exchange (PSE), APC, however, said they incurred a one-time loss of P122 million during the period brought about by a P268-million foreign exchange loss resulting from the revaluation of dollar-denominated loans and placements of some of its subsidiaries and the reversal of a P145-million provision made by an associate company due to an arbitration settlement.

APC said taking into account such losses, its total earnings for the first semester stood at P2.06 billion, still a robust jump of 84 percent from a year ago and translates to an earnings per share of P0.28 for the first semester of 2008.

Income from the power generation business contributed bulk of the company’s earnings at P1.32 billion, a record 182 percent growth from last year’s P468 million.

The company attributed the strong growth to the incremental earnings contributions of P633 million from acquisitions made in 2007 with major contributions coming from the STEAG coal power plant and the Magat hydropower plant, and the improved performance of APC’s other generation assets.

Total power sold during the period tripled from 262 gigawatt-hours (gwh) to 806 gwh.

In power distribution, APC also posted higher electricity sales in the first six months of the year. Income from this business amounted to P767 million, up 15 percent from last year’s P669 million.

The company’s electricity sales for the period grew 17 percent year-on-year, from 1,311 gwh to 1,532 gwh. Excluding the sales contribution of the distribution utilities acquired in 2007, APC recorded an organic growth of six-percent year-on-year.

As of June 30, 2008, the company’s total assets amounted to P36.79 billion, slightly up two percent from the year-end 2007 level.

In April 2008, its 50-percent owned Luzon Hydro Corp. (LHC) entered into a settlement deed with Transfield Philippines  Inc. (TPI), the contractor for its Bakun plant.

The settlement was for the purpose of settling all claims and disputes related to the turnkey contract of the Bakun plant, including the award of the arbitral tribunal constituted in the arbitration proceedings between TPI and LHC. 

Earlier in 2005, LHC appropriately recorded a $24-million contingent obligation based on the ruling of the arbitral tribunal.  The settlement, however, required the payment by LHC of only $14 million to TPI as a partial return of the security posted by TPI.  This, together with LHC’s reversal of the contingent liability provision, will result in a net income to LHC of approximately $7.5 million.