First Gen income drops 20% in H1

MANILA, Philippines — Lopez-led First Gen Corp. reported a 20 percent drop in net income to P6.7 billion in the first half as consolidated revenues from the sale of electricity declined 15 percent to P47.7 billion.

“The full brunt of the second quarter lockdown saw demand for electricity drop significantly with the abrupt economic slowdown. First Gen was not spared, which explains our lower income for the period. 2020 will prove to be a challenging year for all.

This pandemic and its disastrous effect on the economy will give us painful lessons that we must humbly learn from,” First Gen president and COO Francis Giles Puno said.

First Gen said its natural gas-fired power plants posted a 16 percent decrease in recurring earnings for the period at P4.5 billion from P5.5 billion in the same period last year.

“The gas plants continued to suffer from lower electricity sales in the second quarter due to the lockdowns,” First Gen said.

Similarly, Energy Development Corp. (EDC) contributed slightly lower recurring earnings from its geothermal, wind and solar platform of P2.4 billion in the first six months of 2020, from P2.6 billion in the same period a year ago.

The company attributed this to lower electricity prices throughout its geothermal portfolio, offset by lower operating expenses, lower interest expenses, and stable demand from its customers.

First Gen said the recurring earnings contribution of its hydro platform dropped by 68 percent to P200 million for the first half from P700 million in 2019. This was mainly due to lower prices at the Wholesale Electricity Spot Market (WESM), though partially offset by higher ancillary service sales.

Bulk or 61 percent of the total consolidated revenues came from its natural gas portfolio, which posted a 17 percent decrease in the first six months mainly due to lower average natural gas prices coupled with a decline in the plants’ dispatch.

EDC’s geothermal, wind, and solar revenues accounted for 36 percent of the total consolidated revenues at P17.2 billion, lower than its P19.6 billion revenue contribution last year, mainly due to the lower prices at the WESM.