EDC income slides 4% to P8.8 B on higher expenses

By Danessa Rivera (The Philippine Star) | Updated March 11, 2016 - 12:00am

http://www.philstar.com/business/2016/03/11/1561616/edc-income-slides-4-p8.8-b-higher-expenses

MANILA, Philippines - Higher operating expenses tempered net earnings of Lopez-led Energy Development Corp. (EDC) in 2015.

EDC disclosed yesterday its recurring net income amounted to P8.8 billion, a four percent drop from P9.2 billion the previous year due to higher operating expenditures.

“Company results were generally in line with our full year expectation that expenditures would pick up coming into the end of the year,” EDC president and COO Richard Tantoco said in a statement.

EDC recorded higher operating and depreciation expenses from assets reporting their first full year of operations last year.

The firm also incurred increased power plant and pipeline maintenance expenditures for both the Leyte and Palinpinon projects.

On top of these, the company also invested in a fleet-wide typhoon-proofing project to make its facilities more resilient against severe weather disturbances.

EDC also reported its consolidated income, inclusive of non-recurring items, stood at P7.6 billion, 35 percent lower than the P11.7 billion booked the previous year.

It pointed to the absence of a P2.1-billion impairment reversal recorded in 2014 for the Northern Negros power plant and higher foreign exchange losses of P1.3 billion in 2015 brought about by the depreciation of the peso against the US dollar.

Consolidated revenues, on the other hand, rose 11 percent to P34.4 billion from P30.9 billion due to higher energy sales from new projects.

Its Burgos wind power plant reported energy sales of P2.2 billion while Bacman and Nasulo contributed P1.2 billion and P0.6 billion, respectively.

Despite the double-digit increase, Tantoco said the company still missed its 2015 revenues target.

“FY 2015 revenues fell short of target, primarily due to reliability issues at the Tongonan geothermal plant and the temporary curtailment of Burgos wind project early in the year due to transmission constraints,” he said.

“We look forward to start the full rehab and retrofit of the Tongonan units on October of this year with the new turbine rotors from Mitsubishi improving efficiency and increasing output,” he added.