Published May 10, 2017, 10:01 PM By Myrna M. Velasco
Owing to generally depressed prices at the spot market, the first quarter net income attributable to equity holders of First Gen Corporation dipped to $45 million in the first three months this year compared to a more robust profitability of $51 million in the same period last year.
The company said that was 11-percent downtrend, as the ‘merchant’ state of its new power plant capacities “suffered from lower revenues due to seasonally soft Wholesale Electricity Spot Market (WESM) prices.”
For net income attributable to the company, this had been at $41 million in the first quarter, down by $17 million from the year-ago level.
Overall though, the revenues of the Lopez firm over the three-month stretch had been higher to $428 million from last year’s $420 million on the same quarter. Of that, gas portfolio accounted for 54 percent or about $233 million.
Nevertheless, the company qualified that if hinged on targets, “First Gen exceeded expectations as the various subsidiaries successfully implemented their strategic initiatives, such as securing more off-take contracts and reducing expenses.”
In a briefing with reporters this week, Francis Giles B. Puno said they have been trying to secure contracts for at least 200-megawatt capacity of the newly commissioned 414MW San Gabriel gas-fired plant.
However, he admitted that such became a “missed target” last year, but one that they will aggressively pursue this 2017 either with utility buyers or off-takers within the dictum of retail competition and open access (RCOA) phase of the industry.
The company similarly indicated that its debt reduction program “has started to pay off with a decline in interest expenses.”
On first quarter financial performance, Puno explained that “electricity prices in the spot market are normally lower in the first quarter due to cooler weather conditions.”
Yet he stressed the company is optimistic that it will “catch up in the following quarters, especially during the scorching summer months.”
First Gen just reached commercial operations last year for its two new gas plants – the 97MW Avion and 414MW San Gabriel facilities. Yet given the very competitive regime of the industry, cornering contracts had turned tougher for greenfield capacities.