Alsons expects 2017 earnings dip
ALSONS CONSOLIDATED Resources, Inc. expects net profit to decline this year until the completion of the second 105-megawatt (MW) section of its 210-MW coal-fired power plant in Sarangani province, its president said.
“There will be a dip in the profits because by this year, we will have the full loan for section one and section two,” said Tomas I. Alcantara, Alsons chairman and president, on the sidelines of the company’s annual stockholders meeting at the Manila Polo Club in Makati City on Thursday.
“But this will be replaced in the subsequent years by the revenue and profit that will be generated by the second plant,” he said.
The second section of Sarangani Energy Corp.’s $600-million coal-fired power plant in Maasim began construction in January and is expected to start commercial operations by the first half of 2019.
“One year after the completion, we will have the generation of profits already,” Mr. Alcantara said, adding that Alsons will be carrying the load of interest as expense in 2018 to 2019.
In the first quarter, Alsons recorded a net income of P81.53 million, down 45% from P148.14 million in the same period last year as finance charges weighed on the holding firm’s financial performance. Income attributable to the parent firm fell 61% to P34.56 million, from P88.41 million a year ago.
During the annual meeting, Alsons Chief Finance Officer Robert F. Yenko said the company was setting aside a capital expenditure of P8.8 billion in 2017, up from P6.5 billion last year.
“Our profits will remain a little bit tempered,” Mr. Yenko told the company’s stockholders.
At the same time, Mr. Alcantara allayed fears of stockholders about the situation in Mindanao after the declaration of martial law over the island on Tuesday night amid the threat of terrorism.
He said the recent development on the southern island “has not in any way disrupted or affected the normal course” of Alsons’ power operations.
“Our four power facilities in Mindanao continue to operate as scheduled. All of our projects under development... are proceeding according to schedule and are on-track to completion,” he said.
“We respect and fully support the decision of President Rodrigo Duterte to institute all legal measures allowed within the framework of the Constitution in order to ensure the safety and security of the island,” he said.
The Sarangani plant’s second section is expected to provide baseload power to three million residents of South Cotabato, Davao del Sur, Zamboanga del Norte, Zamboanga del Sur, Cagayan de Oro City and other areas in Mindanao.
The first 105-MW first section of the Sarangani plant started operating in April 2016, serving at least three million people in the provinces of Sarangani, Compostela Valley, Agusan del Norte and Agusan del Sur. It also delivers power to the cities of General Santos, Iligan, Butuan and other population centers in Mindanao.
“We are hopeful that the security situation in Marawi will normalize at the soonest time possible. We are confident that the government is in firm control of the situation,” he said. “We remain steadfast in our commitment to the development of the island of Mindanao and the rest of the Philippines.”
At present, Alsons operates three diesel facilities: the 103MW diesel power plant in Iligan City under Mapalad Power Corp.; the 55- MW facility in Alabel, Sarangani under Southern Philippines Power Corp.; and the 100-MW plant in Zamboanga City under Western Mindanao Power Corp.
Based on its latest count, Alsons’ current installed capacity is at 363 MW. The company expects a total generating capacity of 588 MW by end 2021, which it said should be good to meet 25% of Mindanao’s projected peak power demand for that year.
In the second half of 2017, Alsons expects to begin building a 15- MW run- of- river hydroelectric plant in Maasim, Sarangani. It will also start constructing within the year a 105-MW coalfired power plant in Talisayan, Zamboanga City under San Ramon Power, Inc.
On Friday, shares in Alsons closed higher by 2.5% to P1.64% each.