Aboitiz Power income surges nearly 20-fold

MANILA, Philippines - Despite the difficulty of operating hydropower plants amid a prolonged drought over the past months, Aboitiz Power Corp. recorded a net income of P7.4 billion in the first quarter of 2010 up nearly 20-fold from the same period last year. Most of APC’s assets are hydro-based, APC president and CEO Erramon I. Aboitiz said.

“We are pleased with our first quarter results. Our investments in recent years, amounting to P120 billion, are beginning to bear fruit.” 

The higher income translates to an earnings per share of P1.01 during the period as a stronger peso resulted in a P404 million non-recurring gain (from a P109 million non-recurring loss in 2009) due to the revaluation of dollar-denominated loans and placements on a consolidated basis. 

This brings APC’s core net income for the quarter to P7 billion, 14 higher year-on-year.  

The strong showing was mainly due to the fresh earnings contribution of generation assets acquired in 2009. These are the Tiwi-Makban geothermal power plants, which recorded peak generation of 467 megawatt (MW) in 2009, the two 100-MW bunker-fired power barges and the 700-MW Pagbilao coal-fired power plant via an independent power producer administrator (IPPA) contract.

These assets accounted for 93 percent of the generation businesses’ income contribution to APC.  

Despite low generation of the hydro group due to the El Niño phenomenon, total attributable power sold for the quarter was 675 percent higher year-on-year, from 312 gigawatt hours (gwh) to 2,418 gwh. 

The expansion mainly came from the energy sales of the power plants acquired in 2009, which recorded a combined net generation of 2,067 gwh, accounting for 85 percent of total sales for the first quarter of 2010. 

On the matter of supply deficits in Luzon in the first quarter of 2010, Aboitiz added: “It is gratifying to know that Aboitiz Power played a crucial role in supplying power to the Luzon grid when supply was tight and the grid needed it the most. However, we remain steadfast in our strategy to contract our baseload.”

As of the end of the first quarter, APC’s attributable capacity was at 1,945 MW, posting a 237 percent increase from a year ago.

The growth was due to the turnover of the Tiwi-Makban power plants in May 2009, the assumption of the dispatch control of the Pagbilao power plant in October 2009 and the takeover of the two 100-MW power barges, Mobile 1 and 2, in the first quarter this year.

APC’s attributable electricity sales for the quarter ending March 31, 2010 grew nine percent from 772 gwh to 841 gwh. Growth was spurred by increases in attributable power consumption of the residential, commercial and industrial customers, recording increases of five percent, four percent and 13 percent, respectively. 

The distribution businesses’ customer base still grew with the residential segment increasing by four percent and the non-residential inching up two percent. 

Despite the strong growth in electricity sales, the power distribution business recorded a 13 percent drop in its earnings contribution to APC, from P252 million to P219 million. Cotabato Light & Power and Davao Light & Power (DLP) booked higher operating expenses during the period, as their respective back-up power plants were forced to run to provide the much-needed power to the Mindanao grid.