First Gen earnings drop 12% in 9 months

MANILA, Philippines — Lopez-led First Gen Corp. reported a 12 percent drop in its recurring net income in three quarters mainly due to lower electricity sales.

In a disclosure to the Philipine Stock Exchange, First Gen said recurring net income attributable to equity holders in the nine-month period amounted to P9.6 billion, lower than the P11.3 billion posted in the same period last year.

The company said First Gen LNG, its natural gas platform, registered an 11 percent decrease in recurring earnings to P6.8 billion, mainly due to planned outages and the lower dispatch of the 420 megawatt (MW) San Gabriel and the 100-MW Avion natural gas-fired power plants.

Similarly, Energy Development Corp. (EDC) also saw lower recurring earnings during the period to P3.3 billion from P3.5 billion a year ago.

“The renewable company actually reported a higher taxable income as it incurred lower operating expenses and lower interest expenses. The positive income was offset by higher tax payments,” the company said.

Meanwhile, First Gen Hydro Power Corp.’s recurring earnings fell 76 percent to P200 million from P700 million, mainly due to lower prices at the Wholesale Electricity Spot Market (WESM), but was mildly offset by higher ancillary service sales.

Consolidated revenues from the sale of electricity declined by 16 percent to P68.6 billion from P84.2 billion in the same period last year.

The firm’s natural gas portfolio, which accounted for 60 percent of total consolidated revenues, posted a 19 percent decline due to lower average natural gas prices coupled with a decline in the plants’ dispatch

“The Avion power plant did, however, generate fresh revenues from its ancillary service sales,” the company said.

Geothermal, wind and solar revenues from EDC, on the other hand, accounted for 37 percent of consolidated revenues at P25.4 billion. This is lower than the P28.5 billion registered in the same period last year.

Moreover, First Gen Hydro, owner of the 132-MW Pantabangan-Masiway hydroelectric power plants, saw a 31 percent decline in its revenues to P1.3 billion, less than the P1.9 billion last year.

“The growth in power demand understandably did not materialize and it affected power prices. We did see a recovery in power demand this third quarter as conditions eased and we expect this positive trend to continue as the economy slowly recovers from the effects of the lockdowns,” First Gen president and COO Francis Giles Puno said.

Despite the lower overall financial performance in nine months, First Gen emphasized that it remains focused on pursuing its liquified natural gas (LNG) initiatives that seek the entry and ready access of affordable LNG supply from other gas-producing countries.

“First Gen is gaining a lot of positive momentum in developing its LNG platform. We very much appreciate receiving the DOE’s approval of the Permit to Construct, Expand, Rehabilitate and Modify for the construction of an Interim Offshore LNG Terminal (IOT) project in the First Gen Clean Energy Complex in Batangas last September,”Puno said.

“Needless to say, we are a believer in the growth and potential of the country despite the challenges we have all recently undergone,” he said.

First Gen has signed a joint cooperation agreement with Tokyo Gas for the development of the IOT project and has selected McConell Dowell as the preferred tenderer for the EPC of the IOT project.

The company operates 3,492 MW of clean, low-carbon and renewable energy portfolio.