First Gen sees profit boost from 2 new power plants

MANILA, Philippines – Lopez-led First Gen Corp. expects a positive boost this year coming from the start of operations of its two new natural gas-fired power plants in Batangas, company officials said yesterday.

During the company’s stockholders’ meeting yesterday, First Gen president and chief operating officer Francis Giles Puno said the 97-megawatt (MW) Avion gas-fired power plant is expected to achieve commercial operations in the first half of 2016 while the 414-MW San Gabriel power plant will be operational by the second half of the year.

These two plants are expected to contribute to First Gen’s top line and bottom line this year, he told reporters after the meeting.

“Fortunately, for us, when you look at the heat and power demand, power demand from last year was already 11 percent up. The timing for Avion and San Gabriel is actually quite good,” Puno said.

Both plants are sure to augment the company’s bottom line by at least $20 million this year but the increase in revenues will be dependent on Wholesale Electricity Spot Market (WESM) prices, First Gen CFO Emmanuel Singson said in the same event.

“We’re looking at $20-30 million for both Avion and San Gabriel of net income [contribution]...For revenues, it’s based on WESM [prices] so it’s hard to give an exact number,” he said.

“We did $160 million [in income] last year, once Avion and San Gabriel comes in, we expect it to be higher for 2016,” Singson said.

But with the increase in capacity, Puno said both plants will definitely raise revenues of the company for the year.

“In our minds, we are optimistic because we are saying if there’s new capacity, our base is higher we should be able to receive more revenues because you have an increased base,” he said.

The Avion plant was supposed to deliver power during the summer months of 2015 but faced delays as its turnkey engineering, procurement, and construction contractors, with IstroenergoGroup and its Philippine branch company Energy Project Completion Ltd., failed to comply with their obligations.

The San Gabriel plant, on the other hand, was supposed to run before the summer months of 2016.

Puno said both plants are now under commissioning and are dispatching power to the grid based on prices at the WESM until both plants start full commercial operations.

“What we’re doing is when we dispatch the plant through commissioning, that we’re dispatching it during the day, not at night because there’s no value,” he said.