EDC pulls down First Gen Corp. earnings

Manila Times.net
Published : Wednesday, March 21, 2012 00:00 Written by : Krista Angela M. Montealegre, Reporter


Lopez-led First Gen Corp. reported that its earnings fell by half last year on the back of the lower income contribution of affiliate Energy Development Corp. (EDC).


In a disclosure to the Philippine Stock Exchange, First Gen said that its net income attributable to parent company stood at $35 million in 2011, down 50.1 percent from the previous year’s $70.2 million.


EDC incurred a loss of $9.3 million, a reversal of its income contribution of $52.2 million in 2010, resulting from the non-cash impairment of $115.3 million on Northern Negros Geothermal Project and foregone steam revenues of P1.8 billion following its acquisition of the Bacon-Manito Geothermal Power Plants in September 2010


Giles Puno, First Gen president, said that EDC’s poor financial performance was “disappointing but expected,” given the current operating activity focused on the rehabilitation of its geothermal power plants combined with the full impairment of the Northern Negros plant in the company’s books.


“Despite the decreased earnings contribution of EDC in 2011, we continue to be a full believer in the future value of the company and have, in fact, continued to increase our ownership in the company,” he said.


“We are also pleased with the stable performance of our hydro and natural gas plants as they continue to deliver good returns to First Gen. The lower financing costs of the group have also put First Gen on more solid financial footing,” Puno added.


First Gen’s consolidated revenues rose 9.6 percent to $1.4 billion from $1.2 billion because of
the higher dispatch and fuel prices of the 1,000-megawatt Santa Rita and the 500-MW Lorenzo natural gas power plants. The gas plants delivered stable attributable earnings to the parent of $70.9 million last year.


First Gen Hydro Power Corp. contributed earnings of $24.8 million to First Gen, which was 151.6 percent higher compared with the $9.9 million in 2010.


Consolidated interest expense dropped to $84.9 million from $104.2 million. First Gen issued P10 billion worth of perpetual preferred shares in July, allowing the company to prepay P5.1 billion outstanding debt of its unit and buy back some of its convertible bonds.


First Gen shares closed at P13.76 each on Tuesday, down 12 centavos or 0.86 percent from its previous close of P13.88 apiece.