First Gen recurring earnings decline 15% to P3.3 billion

By Myrna M. Velasco – May 19, 2020, 10:00 PM
from Manila Bulletin

The recurring earnings of First Gen Corporation dropped 15-percent to P3.3 billion (US$65 million) in the first quarter versus a more upbeat P4.0 billion (US$77 million) in the same period last year, given that a fraction of the January-March stretch had already been besieged by the coronavirus pandemic lockdown in the country.

The Lopez firm specified that net income attributable to equity holders in the quarter was also lower by 20-percent to P3.3 billion (US$65 million) versus P4.2 billion (US$81 million) last year “due mainly to lower electricity sales across all platforms though partially offset by lower interest expenses and taxes.”

The firm said its revenues within the quarter tapered off by 10-percent to P24.4 billion (US$481 million) as against P28 billion (US$534 million) in parallel first three months of 2019.

“The natural gas portfolio accounted for 60-percent of First Gen’s total consolidated revenues,” the company noted, albeit it qualified that it was down 13-percent this year “mainly due to lower average natural gas prices coupled with a decline in the plants’ dispatch.”

And for the second quarter, the Lopez owned firm is signaling an even more agonizing financial outcome, given the enhanced community quarantine (ECQ) enforced within April-May period for Luzon and other parts of the country.

“With this unforeseen pandemic, 2020 will be challenging for all,” First Gen President and COO Francis Giles Puno recounted, stressing that “though electricity is an essential need, First Gen has not been spared from the difficulties.”

He narrated “the lockdown imposed in March has translated to lower electricity demand,” yet he emphasized that the travails of the health crisis will not stop the company on its strategy “to catalyze the country’s movement towards a decarbonized future.”

At the core of the coronavirus-hinged lockdown, First Gen noted that volume sales from its gas plants had been comparatively dismal – as many industries and commercial establishments had been ordered closed by the government.

“The gas plants suffered from lower electricity sales resulting from depressed demand with the commencement of the ECQ in the latter part of March, as well as higher operating expenses as it booked expenses to aid employees and third parties for ECQ,” the company said.

For its gas platform, the recurring attributable net income to parent firm had been down by 13-percent to P2.0 billion compared to P2.4 billion in the same period last year.

Its subsidiary Energy Development Corporation (EDC) logged flattish recurring earnings at P1.3 billion for its geothermal, wind and solar assets – marginally lower vis-à-vis last year’s P1.4 billion.
“Despite lower electricity sales, the geothermal company was able to achieve savings in its operating and interest expenses as an outcome of its continuous improvement initiatives,” First Gen indicated.

Further, the earnings contribution of the group’s hydro facilities dipped 51-percent to P0.2 billion versus P0.5 billion a year ago, and that had been mainly attributed to “lower prices at the Wholesale Electricity Spot Market (WESM), though partially offset by higher ancillary service sales.”