First Gen Reports 19% Higher 1H16 Attributable Net Income at $113M

Pasig—(PHStocks)—Clean and renewable electricity producer First Gen Corp. (PSE: FGEN) reported net income attributable to equity holders of the parent of $113 million for the first semester of 2016. This was a 19%, or an $18 million, increase from the $95 million it made for the same period in 2015. The Company’s natural gas and hydro portfolios delivered higher earnings.

First Gen’s consolidated revenues from the sale of electricity decreased to $804 million for the first semester of 2016 compared to $965 million last year. The First Gas Plants accounted for $442 million, or 55% of First Gen’s total consolidated revenues. Their revenues were 25% lower in comparison to their contribution of $588 million in the first semester of 2015 due to lower fuel prices, though partially offset by the higher combined dispatch of the gas plants at 84% in the first semester of 2016 versus 80% in 2015. To supplement Santa Rita and San Lorenzo’s earnings, the 414 MW San Gabriel and 97 MW Avion natural gas-fired power plants continue with their commissioning phase during the 2nd quarter of 2016. Following the receipt of liquidated damages caused by the construction delay of the San Gabriel power plant (which was partially offset by the absence of income from insurance claims at San Lorenzo in 2016), the earnings contribution of the natural gas-fired plants increased by $17 million to $82 million in the first six months-ended of 2016.
Energy Development Corp.’s (PSE: EDC) geothermal, wind and solar revenues accounted for $329 million, or 41% of total consolidated revenues. EDC’s revenues declined by $21 million, or 6%, from $350 million in 2015 mainly due to lower spot market prices, though partially offset by the higher dispatch of the Tongonan, Palinpinon and Burgos power plants. EDC’s attributable earnings of $46 million in the first semester of 2016 hardly changed from $47 million last year as the drop in revenue was matched by declines in operating and interest expenses.

The 132 MW Pantabangan-Masiway hydroelectric plants’ (FG Hydro) revenues were $33 million, or 4% of total consolidated revenues from the sale of electricity. FG Hydro showed a growth in revenues of $6 million for the first semester of 2016 versus last year’s $27 million due to higher dispatch this year, though likewise affected by lower spot market prices. Consequently, the earnings contribution of FG Hydro was higher by $4 million or 48% at $11 million.

On a recurring basis, First Gen’s attributable net income for the first semester of 2016 was flat at $88 million. As the gas and hydro platforms benefited from higher dispatch, these were offset by lower contributions from EDC mainly because of lower spot market prices. The Parent Company likewise incurred higher interest expense as a result of a new $200 million term loan it obtained in September 2015.

“Given the current tightness in supply as evidenced by the alerts triggered in recent weeks, the timing of the 97 MW Avion and the 414 MW San Gabriel power plants’ commissioning is a positive development. Both plants have already demonstrated the ability to operate and produce power at full (or even above full) capacity, which has benefited consumers as they ease the current supply tightness,” First Gen President and COO Francis Giles B. Puno said.

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