Aboitiz Power’s profit fell 17% in six months

Manila Standard Today

by Alena Mae S. Flores

Aboitiz Power disclosed to the Philippine Stock Exchange Friday that core net income in the first semester amounted to P9.9 billion, down 23 percent on-year.

The power generation business contributed P10.2 billion to the income, down 20 percent. The power generation business accounts for 91 percent of earnings from Aboitiz Power’s business segments.

“Once adjusted for one-off items, AboitizPower’s generation business registered close to P9.5 billion for the period, 27 percent lower compared to the same period last year,” it said.

Aboitiz Power said earnings from power generation declined due to the lower prevailing prices at the Wholesale Electricity Spot Market.

The average price of electricity in the WESM dropped 55 percent in the January-to-June the period because of low demand for electricity in Luzon.

“This consequently resulted in a year-on-year decline in the power generation group’s average selling price. There was also a 7 percent decline in year-to-date net generation from 4,984 gigawatt-hours in 2010 to 4,640 GWh,” it said.

The company said the lower WESM prices, however, were tempered by Aboitiz Power’s move to reduce its exposure to the spot market with the signing of additional bilateral contracts

Aboitiz Power said net profit in the second quarter rose 4 percent to P5.5 billion,.

“In this quarter, movements in exchange rates resulted in a P36 million non-recurring gain due to the revaluation of consolidated dollar-denominated loans and placements and a one-off gain due to a cost recovery by an associate company relating to its fuel importation,” it said.

Aboitiz Power’s attributable generation capacity stood at 2,331 megawatts by end June, up 16 percent year-on-year. The company said the completion of the 16.5-megawatt Hedcor Sibulan in July last year and the last unit (or 82 MW) of a Cebu coal power plant boosted capacity.

The company also assumed full ownership and control over the 70-MW Bakun hydro facility in May, acquired the 242-MW power barges in Navotas in the same month, and partially completed the rehabilitation of the Ambuklao hydropower facility in June.

“Favorable developments with respect to our greenfield hydro projects, the recent rebirth of the Ambuklao Hydro, as well as the significant strides made by the Subic and Davao clean-coal greenfield plants are demonstrating that AboitizPower’s project development pipeline is full and will provide earnings growth over the next few years. The recent acquisition of the Navotas barges will also provide an interesting flexibility to our portfolio of assets,” Aboitiz Power president and chief executive Erramon Aboitiz said.

Aboitiz Power’s distribution business contributed P1 billion in the first half, up 74 percent, due to increase in sales to 1,814 gigawatthours from 1,753 GWh.