First Gen reports 8% profit drop
BY LENIE LECTURA – NOVEMBER 15, 2022
from Business Mirror
LOPEZ-led First Gen Corp. (FGen) reported a reduction of eight percent in recurring net income at end-September this year despite a 24-percent jump in revenues.
FGen reported last Monday a recurring net income of $194 million versus $211 million posted in the same period a year ago.
“The natural gas platform suffered from reduced income as the natural gas plants were affected by higher taxes, interest expenses and various operational issues at the 420-MW [megawatt] San Gabriel Power Plant and 97-MW Avion Power Plant,” it said.
Revenues from the sale of electricity stood at $1.996 billion, a 24-percent increase from $1.606 billion in the previous year. The higher revenues were derived from electricity sales attributed to elevated fuel and Wholesale Electricity Spot Market (WESM) prices.
The natural gas portfolio accounted for 65 percent of First Gen’s total consolidated revenues, while 31 percent came from the geothermal, wind and solar plants of Energy Development Corp. (EDC). The remaining 4-percent balance comes from the hydro plants.
“First Gen’s third quarter earnings saw EDC make a recovery from higher spot market prices and inflation-adjusted prices for its power purchase agreements. The natural gas platform, however, continues to be beset by fuel supply curtailment from Malampaya that required us to use more costly liquid fuel.
The expected commercial operations of our LNG terminal in the second half of 2023 will help address fuel supply security issues,” First Gen President and COO Francis Giles B. Puno was quoted in a statement as saying.
The natural gas platform reported a 13-percent decrease in recurring earnings from January to September this year to $142 million from $163 million.
Among others, the reasons for the decline were brought about by lower capacity fees of the 420-MW San Gabriel plant due to insufficient availability of gas supply from Malampaya reported in January; unscheduled outages of the 97MW Avion power plant’s unit 1 due to turbine damage; and higher income taxes compared to the previous year.
The geothermal, wind and solar platform under EDC, meanwhile, posted higher sales and operating income mainly from Unified Leyte’s increased WESM sales and higher electricity prices from its contracts.
EDC’s recurring and attributable earnings at $66 million for the first three quarters of 2022 were 6-percent higher than its recurring income of $62 million in 2021.
The hydro platform’s contribution to First Gen’s recurring and non-recurring earnings was at $6 million, which was almost unchanged from last year.
First Gen has 3,501MW of installed capacity in its portfolio, which accounts for 19 percent of the country’s gross generation.
