MANILA, Philippines — Renewable power producer Alternergy Holdings Corp. (AHC) continues to see brisk growth despite high inflation and peso depreciation that fatten spending.
“Bullish,” AHC president Gerry Magbanua told The STAR when asked about their growth outlook for the next fiscal year.
The company’s fiscal year begins in July and ends in June of the following year.
“We just inaugurated our Palau project. Compared to last year, we now have the Palau project, so that would be a key growth driver in this coming fiscal year,” he said.
The firm and its unit, Solar Pacific Energy, recently switched on Palau’s first solar and battery energy storage system project, which is claimed to be the largest of its kind in the Western Pacific.
AHC earned P158.2 million for the nine months ending March 2024, a reversal of the P8.6 million net loss incurred in the same period last year.
The turnaround was driven by the increased sale of electricity from the Palau project, lower finance costs and higher interest income.
Magbanua, however, said they expect macroeconomic headwinds to play a spoiler role in the company’s growth prospects.
“Inflation is a big factor. (It) is driving interest rates. With unabated inflation, there’s going to be pressure on the interest rate. There’s a ripple effect on the impact of that on the (foreign) exchange rate,” he said.
The country’s headline inflation hit a six-month high in May at 3.9 percent from the preceding month’s 3.8 percent as utility and transport costs grew at a faster pace.
The fresh data will be considered by the policy-making Monetary Board in its upcoming rate-setting meeting later this month.
The peso, meanwhile, closed at 58.52 against the dollar last Friday, still among 19-month lows.
To mitigate the potential risks of these headwinds, Magbanua said they buy dollars ahead and provide an allowance on their projections.
“We just have to manage the effect because this could drive up our cost. We don’t have a specific formula; we just look at the situation and see what fits in the given situation,” he added.
Within the next three years, AHC plans to develop eight projects and expand its installed capacity by up to 403 megawatts.
This month, the power firm wants to secure P6.3 billion in loans from local banks to finance its wind and solar projects.