First Gen registers $243-million net income last year

FIRST Gen Corp. posted $243 million in net income last year, up 51 percent from the previous year, driven by the strong contribution of its natural gas business.

It reported on Wednesday its natural gas business delivered recurring earnings of $186 million last year as against $120 million a year ago.

The company’s newest natural gas-fired plant, the 420-megawatt (MW) San Gabriel flex plant (San Gabriel), benefited from significantly higher dispatch and revenues as it sold power at attractive prices in the spot market in the first half of 2018, and subsequently sold its full production to Meralco under its power-supply agreement starting last June.

“2018 was an exceptional year for First Gen as we concretized value from the sizable investment made for the modern 420-MW San Gabriel natural gas-fired power plant. This was made in anticipation of the market’s increased electricity demand and the need for new cost-competitive power supply to the grid,” First Gen President and COO Francis Giles B. Puno said.

The company’s other gas plants—the 1,500-MW Santa Rita and San Lorenzo natural gas-fired plants—continued their reliable performance, incorporating the technical upgrades First Gen has invested over the years that effectively reduced the power rates to consumers.

First Gen’s 2018 performance was also made better by lower interest expenses and higher interest income as a result of the group’s deleveraging and refinancing initiatives. Savings in interest expense and the receipt of insurance proceeds likewise offset unrealized foreign-exchange losses and higher deferred taxes.

Meanwhile, consolidated revenues from the sale of electricity increased by 16 percent to $2 billion, from $1.7 billion in 2017.

Meanwhile, Energy Development Corp.’s (EDC) geothermal, wind and solar revenues accounted for $652 million or 33 percent of total consolidated revenues.

EDC’s renewable-energy portfolio generated higher revenues in 2018, primarily driven by the full recovery of the Unified Leyte plants that resulted in higher sales volume.

“Our geothermal platform, through EDC, likewise made a remarkable recovery in the second half of 2018 with the faster-than-expected recovery of its Unified Leyte plants from the outage caused by natural calamities in 2017, coupled with higher sales volume and more attractive selling prices. We expect EDC to continue to outperform this year,” Puno said.

FG Hydro, owner of the 132-MW Pantabangan-Masiway hydroelectric plants, reported higher revenues at $36 million. The hydro plants accounted for 2 percent of First Gen’s total consolidated revenues. The absence of ancillary service sales in the first quarter of 2018 was partially offset by the hydro plants’ higher volume sales to WESM and higher spot market prices in 2018.

First Gen is a leading independent power producer in the Philippines that primarily utilizes clean and indigenous fuels such as natural gas, geothermal energy from steam, hydroelectric, wind and solar power. It has 3,492 MW of installed capacity in its portfolio, which accounts for 21 percent of the country’s gross generation capacity.

Puno said the company is now focused on firming up its future direction with the LNG regasification terminal investment in partnership with Tokyo Gas.