Aboitiz Power income dives 57% to P3.7-B in first half

Published July 28, 2020, 3:45 PM by Myrna M. Velasco

https://mb.com.ph/2020/07/28/aboitiz-power-income-dives-57-to-p3-7-b-in-first-half/

 

Given the coronavirus contagion that pummeled businesses in recent months, listed firm Aboitiz Power Corporation reported that its net income in the first half tumbled 57-percent to P3.7 billion from a more auspicious bottom line of P8.6 billion in the same six-month stretch in 2019.

And in the second quarter when the pandemic exceptionally stymied economic activities in the country because of the government-enforced lockdown, the company’s income took further beating with 67-percent drop to P1.7 billion compared to P5.0 billion in a parallel period last year.

On its six-month income, Aboitiz Power emphasized that it logged non-recurring gains of P224 million, which was higher than the P121 million the previous year. It attributed such to “net foreign exchange gains on the revaluation of dollar-denominated liabilities.”

The firm emphasized that if these one-time gains had not been posted, the earnings of the company from January to June should have been lower at P3.5 billion, still seemingly inferior compared to last year’s P8.5 billion.

Primarily in the second quarter, the company noted decline in its earnings before interest, taxes, depreciation and amortization (EBITDA) “stemming from decreased demand due to the enforcement of COVID-related community quarantine and outages.”

Aboitiz Power similarly logged additional tax expenses following the lapse of the income tax holiday (ITH) perks of its Therma South Inc. and GNPower Mariveles Coal Plant Ltd. Co.; compounded by added interest expense from bond and loan that were availed of in last year’s fourth quarter.

For the power generation and retail supply segments of the company’s operations, Aboitiz Power indicated that it registered EBITDA of P14.8 billion, which was 17-percent lower versus last year’s P17.8 billion in the same six-month period.

“The variance was primarily due to reduced demand resulting from the enforcement of COVID-related community quarantines, as well as forced outages during the first half of 2020 involving Pagbilao units 1-3, TSI (Therma South Inc) Unit 2 and GMCP (GNPower Mariveles Plant) Unit 2.”

The reduction in earnings, it stressed, “offset the decrease in purchased power costs during the first half of 2020,” as well as the revenues cornered from its Therma Visayas Inc. (TVI) and Therma Mobile Inc. (TMO) plants.

In terms of energy sold during the covered financial review period, it declined 6.0-percent to 10,764 gigawatt-hours (GWh) from 11,460 GWh last year, and this was mainly attributed to “lower demand brought about by the pandemic and forced outages.” Conversely, overall capacity sold during the period

had been higher by 12-percent to 3,388 megawatts from 3,035MW a year ago.

The income contribution of the distribution segment of its business had been flattish at roughly the same level of P3.7 billion, despite the reported fall in sales.

“Energy sales decreased by 7.0-percent to 2,629 gigawatt-hours during the first six months of 2020 from 2,842 GWh in the first half of 2019,” the company stipulated, and that had been similarly traced to the drop in energy consumption of commercial and industrial end-users because of the stay-at-home orders of the government that in turn had affected work flow in businesses.

Ayala firm partners with Marubeni subsidiary for 150-MW diesel plant

Published July 27, 2020, 10:00 PM by Myrna M. Velasco

https://mb.com.ph/2020/07/27/ayala-firm-partners-with-marubeni-subsidiary-for-150-mw-diesel-plant/

 

ACE Endevor Inc., a subsidiary of AC Energy Philippines Inc. of the Ayala group, has inked a deal with a subsidiary firm of Marubeni Corporation of Japan for its greenfield 150-megawatt diesel-fired power facility in Pililla, Rizal.

The Japanese firm has used Axia Power Holdings Corporation in the joint venture pact it sealed with the Ayala company for that power generating facility.

“Under the agreement, Axia will acquire 50-percent of the shares and 50-percent of the economic rights in the company’s subsidiary Ingrid Power Holdings Inc.,” AC Energy has stipulated in its disclosure to the Philippine Stock Exchange.

Ingrid Power is the corporate vehicle for the Pililla diesel plant project that is targeted to be on commercial stream by first quarter of next year.

In AC Energy’s case, it will hold the balance of the 50-percent shares and 45-percent economic rights,

with Endevor having 5.0-percent of the economic rights in the Ingrid power project.

The JV deal concluded by the two firms will still be subject to the approval of the Philippine Competition Commission (PCC), according to the Ayala energy company.

As designed, the Pililla plant “will supply peaking and reserve power to the Luzon grid,” as the industry is already seeing tight supply conditions straining the country’s main power grid especially at the time when the coronavirus pandemic wanes.

As of January this year, AC Energy already infused P570 million into the Ingrid power facility; which is more than one-third of the project’s indicative cost of P1.5 billion.

Based on the project’s design, the facility will have fast start, high speed and quick response capability – and this will make it ideal for a peaking plant or the facility that could be dispatched by the grid operator when there is sudden surge in system demand.

The project developer’s plan is to also offer the generated electricity from the plant for contingency or spinning reserve; or for the regulating reserve requirement of system operator National Grid

Corporation of the Philippines.

Probable shortfall in power system reserves had been anticipated this year, but because of the lingering pandemic, that scenario in the country’s power supply-demand outlook had been avoided.  

DOE extends submission of power utilities’ investment, expansion plans

Published July 27, 2020, 10:00 PM by Myrna M. Velasco

https://mb.com.ph/2020/07/27/doe-extends-submission-of-power-utilities-investment-expansion-plans/

 

The Department of Energy (DOE) has extended the deadline for the submission of Distribution Development Plan (DDP) of power utilities, or the plan that will detail out investments as well as their network expansion plans over the next 10 years.

In an advisory issued by DOE Undersecretary Emmanuel P. Juaneza, he apprised the distribution utilities (DUs) and electric cooperatives (ECs) that their extended submission date shall be until August 30 this year, instead of the earlier deadline of July 31.

But for the ECs, in particular, it was emphasized that they shall also abide by earlier submission of the 2020-2029 DDPs with the National Electrification Administration (NEA) by August 15; and then subsequently with the DOE on or before August 30.

For the privately-owned DUs, local government unit-owned-and-operated distribution systems or entities primarily those that have been authorized to operate within economic zones, the DOE specified that DDP submission shall be August 30 this year and must be channeled through the department’s Electric Power Industry Management Bureau.

The DDP requirement from DUs shall flesh out their 10-year program on the acquisition of sub-transmission assets, expansion and rehabilitation of distribution facilities as well as the costs or investments associated to these activities or facility installations.

Further, the distribution plan must factor in load growth in the service/franchise areas of these power utilities – and they must also set forecast on the expanded customers they shall be serving within the covered 10-year period; as well as the corresponding energy and demand requirements.

In the DOE advisory, Juaneza noted that the deadline extension had been in consideration of the community quarantine declarations of the government because of the coronavirus pandemic.

“This advisory shall only apply to the submission of the 2020-2029 DDP,” the department stated, albeit emphasizing that “DUs must consider and reflect the impact of the community quarantine declarations due to COVID-19 for the past three months in the preparation of the 2020 DDP.”

Apart from the DDP, the DUs and ECs had likewise been instructed to submit additional documents to underpin their network planning – and such shall include their 2020 power supply procurement plan; and a board resolution or a board secretary’s certificate approving their 2020-2029 DDP.

Another major requirement will be submission of their power supply agreements (PSAs), including attachments as may be required by the energy department.

The DUs are also mandated to submit “a normalized forecast of coincident peak demand in megawatts (MW), megawatt-hour (MWh) off-take and MWh input (in excel spreadsheet), without consideration to the community quarantine declarations due to COVID-19,” noting that such could be “a critical consideration to the forecast input in the succeeding DDPs.”

The power utilities were similarly directed to turn in documents “showing that the DU invoked that the force majeure provision in the power supply agreements due to COVID-19 community quarantine declarations.”