Napocor expects modest income

MANILA, Philippines – The state-run National Power Corporation (Napocor) expects to reverse its losses last year to a modest income this year, its top executive said yesterday.

Napocor president Froilan Tampinco told reporters that they see a “little profit” this year despite the impact of the financial crisis in the company’s operation.

He said the success of the Power Sector Assets and Liabilities Management Corp.’s bond float recently signified continuous confidence of investors.

PSALM, created under the Electric Power Industry Reform Act (EPIRA), is tasked to handle the finances of Napocor. It also manages the sale of Napocor’s power plants and contracts.

”It is possible towards the end of the year. We hope an improvement in our financial picture towards the end of the year, “ he said. ”We expect a little profit.” 

The Napocor chief, however, pointed out that the financial performance of the company will still hinge on the ability of the company to manage its finances and its debt payments.

PSALM president and CEO Jose Ibazeta earlier said proceeds from the global bonds will be used to refinance maturing debts of Napocor which stood at $6.8 billion as of end-2008. 

Aside from the success of the bond issuance, Tampinco said their financial performance this year will also be dependent on their rate recovery applications.

Napocor and PSALM filed for an increase of 17 centavos per kilowatthour (kwh) in Luzon and P2.02 per kwh for Visayas under the generation rate adjustment mechanism (GRAM) and incremental currency exchange rate adjustment (ICERA). 

Tampinco said they are still finalizing their financial report for 2008.

Napocor is projected to incur a P63.19-billion net loss in 2008 from a net income of P119.29 billion in 2007.

Department of Budget and Management (DBM) data projected that Napocor’s foreign currency exchange losses will be at P44.25 billion in 2008 from gains of P112.08 billion in 2007.

A huge drop in sales is seen to contribute to the losses of Napocor due to the disposal of some of its major assets last year.

Napocor’s revenues is expected to decline to P45.42 billion as against P62.72 billion in 2007.

It would be noted though that the DBM’s data on Napocor’s earnings for 2007 was lower than the P136.07 billion as indicated in the power firm’s annual report. – Donnabelle Gatdula