Aboitiz Power earmarks P170B capex in four years

CEBU, Philippines - As the Philippine economy paints brighter prospects ahead, AboitizPower (AP) announced to pour in some P170 billion capital expenditure (capex) in the next four years.

Together with its partners, the company will build additional generation capacity for several greenfield and brownfield projects of both hydro and clean coal technology,” said AP president Erramon I. Aboitiz.

“We continued to enhance our power distribution networks, driving further efficiencies and productivity, with the end goal of improving reliability and customer service,” said Aboitiz.

AP, a publicly-listed subsidiary of conglomerate Aboitiz Equity Ventures (AEV), is also preparing to embrace open access when it comes into full implementation, “giving users [consumers of over 1MW at first] the power of choice.”

In 2001, AP reported a 14 percent plunge of its income contribution to the AEV, to P16.5 billion, due to lower net generation levels and weaker average selling prices.

Of this amount, the power generation business of the group contributed P15.6 billion for the year, a decline of 16 percent year-on-year.

As of end 2011, the total attributable capacity was at 2,350 megawatts (MW), 15 percent more than 2010. This is comprised of a good mix of renewable and non-renewable generation facilities, with contracted capacities at more than 70 percent, thus mitigating earnings volatility from its exposure to the spot market.

Meanwhile, the power distribution business recorded a 24 percent YOY increase in its earnings contribution to AEV, contributing P1.8 billion, mainly due to margin improvements and volume increase in electricity sales.

Attributable electricity sales for the year increased by three percent YoY, reaching 3,727 GWh. Growth last year came from its industrial customer base, with residential sales basically flat, Aboitiz reported.

The group’s gross margin saw an improvement last year, going from P1.25 kWh to P1.44 per kWh. This was a result of controlled costs and favorable rate adjustments under the Performance Based Regulation (PBR) scheme.

According to Aboitiz, the company will continue spearheading future growth by building new capacity through investments in Greenfield projects and rehabilitation of existing ones.

He said the company aims to build the “right mix” of energy sources in its generating portfolio to be able to deliver better power solutions to help drive economic activity at reasonable and competitive prices.

“Aboitiz Power will continue to keep a watchful eye for acquisition opportunities, in both the generation and distribution sectors. The company will also go on actively participating in the privatization of targeted National Power Corporation [NPC] assets that will be bid out by the Power Sector Assets and Liabilities Management Corporation [PSALM],” said Aboitiz during the company’s 2011 report to stockholders. (FREEMAN)