First Gen says 2010 profit rose to $121m

Manila Standard Today

by Alena Mae S. Flores

First Gen Corp., owned by the Lopez group, said Monday it registered a consolidated net income of $121 million in 2010, up 27 percent from $95 million in 2009, due to higher revenues.

The company reported to the Philippine Stock Exchange that net income attributable to the parent company rose $70.2 million, up 319 percent from $16.7 million a year ago.

First Gen’s consolidated revenues also jumped to $1.2 billion, up 33 percent or $222.1 million, from $1 billion in 2010.

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

The company said the reliable dispatch of First Gas’ 1,000-megawatt Santa Rita and 500-MW San Lorenzo natural gas-fired power plants were the main contributors to the increase in revenues from the sale of electricity.

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

The First Gas plants delivered stable earnings of $130.1 million in 2010.

First Gen said there was a notable increase in equity in net earnings from associates, namely Energy Development and FG Hydro in 2010.

Energy Development, the country’s largest operator of geothermal-fired power plants, provided higher earnings to First Gen of $52.5 million in 2010, up by $21.5 million, from $31 million in the previous year.

The improvement resulted from the full-year effect of the operation of the 192.5-MW Palinpinon and 112-MW Tongonan geothermal power plants, Energy Development’s receipt of VAT tax credit certificates and lower deferred taxes.

The improvement in earnings was partially offset by the impairment booked for Energy Development’s 49-MW Northern Negros geothermal power plant and lower revenues from Energy Development’s Unified Leyte geothermal power plant complex.