First Gen posts $121-M income in 2010

Business Mirror

MONDAY, 28 MARCH 2011 20:17

LISTED First Gen Corp. said its consolidated net income grew by $26 million to $121 million from $95 million in 2009. 

In a disclosure, First Gen said net income attributable to the parent company increased by 319 percent to $70.2 million last year from $16.7 million in 2009.  Consolidated revenues increased by 22 percent to $1.2 billion in last year from $1 billion.

“The substantial increase in earnings was due to the strong operating performance of the First Gas group, First Gen Hydro Power Corp. and Energy Development Corp. (EDC). These developments were complemented by the positive effects of the company’s deleveraging program,” president Giles Puno said. 

First Gen said the reliable dispatch of First Gas’s 1,000-megawatt (MW) Santa Rita and 500-MW San Lorenzo natural gas-fired plants were the main contributors to the revenue hike. The said plants delivered stable earnings of $130.1 million.

The higher revenues, however, were offset by corresponding increases in the pass-through fuel charges to its electricity off-taker and higher operations and maintenance fees paid to Siemens Power Operations Inc. 

First Gen added that there was a notable increase in equity in net earnings from  EDC and FG Hydro in 2010.   EDC, the country’s largest operator of geothermal-fired power plants, provided earnings of $52.5 million in 2010, up by $21.5 million, compared with $31  million in the previous year.  The was due to the full-year effect of the operation of the 192.5-MW Palinpinon and 112-MW Tongonan power plants, EDC’s receipt of value-added tax credit certificates and lower deferred taxes.  

First Gen said the improvement in earnings was, however, partially offset by the impairment booked for EDC’s 49-MW Northern Negros geothermal power plant and lower revenues from Unified Leyte geothermal power plant complex. Adding to the positive variance was FG Hydro’s income contribution, which increased to $9.9 million last year from $1.5 million in 2009, were the improved prices at the Wholesale Electricity Spot Market  and higher dispatch of the hydro plants. 

The increase in EDC and FG Hydro’s earnings contribution was coupled with lower interest expenses at Red Vulcan Holdings Corp., the company that directly owns 40 percent of  EDC.  

In 2010, Red Vulcan reduced its debt by 40 percent to P8.3 billion from P13.8 billion. 

First Gen added that its total debt dropped to $1.1 billion last year from $1.2 billion in 2009.

Other than its scheduled debt amortizations, First Gen said it also bought back and retired $74 million in face value of its convertible bond in 2010 and paid off its P5-billion bond issuance.  

The paydown, according to First Gen, resulted in lower interest expenses last yearat $104.2 million from $112.1 million in 2009. 

First Gen said part of the proceeds from its P15-billion rights offer in January 2010 was used for the loan prepayments.  --Paul Anthony A. Isla