First Gen logs 11% income hike to P7.1B in first half

By Myrna M. Velasco – August 13, 2021, 2:30 PM
from Manila Bulletin

Lopez-led First Gen Corporation sustained its robust profitability and that enabled it to post 11-percent net income hike in the first half to P7.1 billion ($148 million) versus a leaner P6.7 billion ($133 million) in the same period last year.

The company’s rise in earnings, according to First Gen President and COO Francis Giles B. Puno, had been mainly attributed to power demand bouncing back from pre-pandemic levels, “despite the limitations brought about by the persistent slow recovery of the economy.”

Consolidated revenues turned in P50.8 billion (US$1.054 billion) within January to June this year; 12-percent higher from last year’s P47.7 billion (US$939 million) – and that’s dominated by its gas assets with 58-percent share in the total revenues; followed by subsidiary Energy Development Corporation (EDC) with 36-percent fraction in the pie; and then the hydro portfolio with 5.0-percent share.

First Gen’s major income driver in the initial six months of the year had been its gas platform, with it registering a significant 21-percent income climb to P5.2 billion (US$107 million) from P4.5 billion (US$88 million) a year ago.

In particular, the company noted that its 97-megawatt Avion plant “enjoyed higher electricity sales as it supplied the grid with supplemental power during constraint periods.”

On the firm’s other gas-fired generating facilities, First Gen emphasized that there had been lower income tax rates levied upon them because of the implementation of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act; hence, that helped shore up overall bottom line.

Nevertheless, the Lopez firm indicated that the combined effect of the higher generation of Avion and the lower tax rates had been “slightly offset by the 420MW San Gabriel power plant’s lower generation due to repair work that was just completed in the first quarter of the year.”

On the whole, the gas business segment of the company posted attributable net income to parent at P5.2 billion (US$108 million) from last year’s P4.5 billion (US$88 million).

For EDC’s geothermal, wind and solar facilities, earnings contribution hovered at P2.3 billion (US$47 million), lower by 3.0-percent versus last year’s P2.4 billion (US$48 million).

That slight decline in income, the company qualified, “were offset by lower interest expenses and income taxes,” hence, EDC’s attributable income to parent was still at a sizeable P2.2 billion (US$46 million) within the semester.

Further, the Lopez group’s hydropower generation business segment registered attributable earnings of P0.3 billion (US$6 million) from the year-ago level of P0.2 billion (US$5 million).

“The P132.8MW Pantabangan-Masiway power plants generated higher revenues due to the commencement of its contract with Meralco (Manila Electric Company) that was augmented by merchant sales,” the company expounded.

Onward, Puno stressed that “the brownouts experienced in the second quarter of 2021 highlights the importance of keeping our portfolio properly maintained and running.”

Given such incidents in the power system then, he highlighted the importance of the firm’s liquefied natural gas (LNG) import terminal that is targeted online by next year.

“We are also working to deliver more power projects across our portfolio despite the uncertainty surrounding the market and its accompanying business risks,” Puno stated.