First Gen reports 34% growth in net income to $60 M in Q1

Published May 9, 2018, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2018/05/09/first-gen-reports-34-growth-in-net-income-to-60-m-in-q1/

FIRST GEN WELCOMES NEW INDEPENDENT DIRECTOR – First Gen Corporation Chairman and CEO Federico R. Lopez (second from left) welcomes new independent director Alicia Morales (second from right), with two other top company officials after they were reelected by stockholders during the company’s annual stockholders’ meeting on May 9, 2018. Ms. Morales is a former chairman of the Philippine Stock Exchange. Together with Lopez are fellow directors Francis Giles B. Puno (first from left), concurrent president and COO of First Gen; and Richard B. Tantoco (first from right) who is also president and COO of subsidiary Energy Development Corporation, the world’s largest vertically integrated geothermal company. First Gen is the country’s leading clean and renewable energy company with 3,490 megawatts in installed capacity, as of April 2018.

With better cash flow from its gas-fired generating facilities, First Gen Corporation has driven up by 34 percent the recurring net income to US$60 million in the first quarter from last year’s $45 million.

The Lopez firm said its gas facilities delivered recurring earnings of US$46 million vis-à-vis last year’s US$19 million in the same quarter.

Given the upturn in first quarter financial performance, First Gen Chief Finance Officer Emmanuel Singson indicated the company’s full-year prospective income may hit the level of US$200 million versus $163 million in 2017.

First Gen President and Chief Operating Officer Francis Giles B. Puno noted that despite the ‘merchant state’ of San Gabriel’s 414-megawatt output, prices fetched from the Wholesale Electricity Spot Market (WESM) from January to March fared better.

“Even if San Gabriel is currently fully merchant and awaiting the regulatory approval for the power supply contract with Meralco (Manila Electric Company), we still posted a strong turnaround with higher spot market prices in the first quarter of 2018,” he said.

In terms of consolidated revenues, the company logged electricity sales growth of 7.0-percent to $457 million from last year’s $429 million within the January-March period. “The natural gas portfolio accounted for $293 million, or 64-percent of First Gen’s total consolidated revenues,” the Lopez firm said.

The recurring earnings contribution of the gas plants had been higher by $27 million to $46 million, “due to a positive reversal from the losses previously incurred by San Gabriel,” the company expounded.

It added that “strong showing from the 97MW Avion and the 420MW San Gabriel flex plant (San Gabriel), as well as savings in interest expense, partly offset unrealized foreign exchange losses and EDC’s (Energy Development Corporation) weak performance.”

On the conglomerate’s recurring earnings from geothermal platform, this had been drastically pulled down to $14 million from $32 million, the downtrend of which was mainly “due to damage caused by typhoon Urduja that affected the Leyte site in December 2017.”

For hydro, this segment of the Lopez group’s business logged slightly lower earnings of $5.0 million for the period, “despite the absence of ancillary service sales.”