First Gen Reports 42% Higher 9M 2016 Attributable Net Income at $170M
Pasig—(PHStocks)—Clean and renewable electricity producer First Gen Corp. (PSE: FGEN), a Lopez Group (PSE: LPZ) company, reported net income attributable to equity holders of the parent of $170 million for the first nine months of 2016. This was a 42%, or a $50 million increase from the $120 million it made for the same period in 2015. The Company’s newest natural gas-fired power plant, the 414 MW San Gabriel Flex Plant, booked income from liquidated damages caused by its construction delay while Energy Development Corp. (PSE: EDC) and First Gen Hydro Power Corp. (FG Hydro) both delivered higher earnings.
First Gen’s consolidated revenues from the sale of electricity decreased to $1.17 billion for the first three quarters of 2016 compared to $1.4 billion last year. The First Gas Plants accounted for $632 million, or 54% of First Gen’s total consolidated revenues. Their revenues were 24% lower in comparison to their contribution of $834 million in the same period of 2015 mainly due to lower fuel pass-through prices, worsened by the slightly lower combined dispatch of the gas plants at 79% in the first three quarters of 2016 versus 81% in 2015. To supplement Santa Rita and San Lorenzo’s earnings, San Gabriel recorded $53 million in delay liquidated damages and unrealized foreign exchange gains. The 97 MW Avion natural gas-fired power plant declared commerciality last September 26, 2016; hence, it generated both commissioning and operating income during the 3rd quarter of 2016. The earnings contribution of the natural gas-fired plants increased by $41 million to $130 million in the first nine months of 2016.
EDC’s geothermal, wind and solar revenues accounted for $500 million, or 42% of total consolidated revenues. EDC’s revenues declined by $30 million, or 6% from $530 million in 2015 mainly due to an unfavorable effect of foreign exchange translation as First Gen translates EDC’s Philippine Peso-denominated revenues into U.S. Dollars to conform to First Gen’s functional currency reporting of its financial statements in U.S. Dollars. EDC’s actual revenue contributions in Philippine peso declined by PhP298 million (or $6 million) due to lower spot market prices in spite of the higher dispatch of its power plants. Despite this, EDC’s attributable earnings of $67 million in the first three quarters of 2016 came in higher from $60 million last year as the drop in revenues was matched by declines in operating and interest expenses, supplemented by a receipt in insurance claims from its BacMan project.
The 132 MW Pantabangan-Masiway hydroelectric plants’ revenues were $41 million, or 4% of total consolidated revenues. FG Hydro showed a growth in revenues of $6 million for the period ended September 30, 2016 versus last year’s $35 million due to higher ancillary service sales, though likewise affected by lower spot market prices. Consequently, the attributable earnings contribution of FG Hydro was higher by $4 million, or 47% at $13 million.
On a recurring basis, First Gen’s attributable net income for the first nine months of 2016 was flat at $128 million. As most of the platforms benefited from higher dispatch, these were offset by 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.
“With our two newest natural gas–fired plants – the 414 MW San Gabriel Flex Plant and the 97 MW Avion Peaking Plant – achieving commercial operations, First Gen is the leader in natural gas-fired power in the country. Not only is power from natural gas competitively-priced, it is also the cleanest among fossil fuels. Moreover, its operating capabilities are the most ideal for our consumer-dominated load profile. These plants were built specifically to serve our grid’s unique demand requirements,” First Gen President and COO Francis Giles B. Puno said.