Lopez-led First Gen Q3 profit de­clines

Business World - - CORPORATE NEWS - Vic­tor V. Saulon

FIRST GEN Corp. posted $42.81 mil­lion in third-quar­ter net in­come at­trib­ut­able to eq­uity hold­ers of the par­ent firm, down 29% from $60.68 mil­lion in the same pe­riod last year, the Lopez-led com­pany told the stock ex­change.

“De­spite the re­cent calami­ties like the Batan­gas and Leyte earth­quakes which neg­a­tively af­fected the op­er­a­tions of our gas plants and our largest geo­ther­mal fa­cil­ity, First Gen’s re­cur­ring [third-quar­ter] net in­come only slightly dipped,” said First Gen Pres­i­dent and Chief Op­er­at­ing Of­fi­cer Fran­cis Giles B. Puno.

For the nine months to Septem­ber, the hold­ing firm for the Lopez fam­ily’s power gen­er­a­tion and en­ergy busi­nesses said its at­trib­ut­able net in­come was at $ 100.81 mil­lion, lower by 42% com­pared with the $173.78 mil­lion earned a year ago.

The com­pany presents its fi­nan­cial re­port in US dol­lars, which is its func­tional cur­rency.

Ad­just­ing for non­re­cur­ring items, First Gen recorded a net in­come at­trib­ut­able to the par­ent com­pany of $122.95 mil­lion, a 3.6% drop from $127.60 mil­lion in the same nine-month pe­riod last year.

It iden­ti­fied the non­re­cur­ring items as loan and in­ter­est rate swap ex­penses, typhoon and earth­quake- re­lated ex­penses, pro­ceeds from liq­ui­dated dam­ages and in­sur­ance claims, in­put value-added tax claims writ­tenoff, one- time gains and losses, move­ments in de­ferred in­come taxes, un­re­al­ized for­eign ex­change dif­fer­ences, and gains on de­riv­a­tive trans­ac­tions

The hold­ing firm, which pro­duces mostly re­new­able elec­tric­ity, said at­trib­ut­able net in­come was lower than re­cur­ring net in­come by about $22 mil­lion “due to the one- time ef­fect of break fund­ing costs in­curred as a re­sult of a $500-mil­lion re­fi­nanc­ing of the 1,000 MW (megawatt) Santa Rita Power Plant’s long-term debt last May 2017.”

First Gen also cited the pre­mium paid for sub­sidiary En­ergy De­vel­op­ment Corp.’s par­tial buy­back of its US dol­lar- de­nom­i­nated bond, and the geo­ther­mal com­pany’s earth­quake- re­lated ex­pen­di­tures, among oth­ers.

“Other power plants in the port­fo­lio, like Bac­man and Bur­gos, were able to de­liver bet­ter prof­its this year while our new­est gas plant San Gabriel re­cov­ered in the third quar­ter. Our mer­chant nat­u­ral gas-fired plants have been pro­vid­ing much- needed power these past few months as numer­ous power plants in the grid went off­line due to un­ex­pected and planned out­ages,” Mr. Puno said.

Con­sol­i­dated rev­enues from the sale of elec­tric­ity in­creased by 9% to $1.28 bil­lion from $1.17 bil­lion a year ago.

First Gen’s nat­u­ral gas port­fo­lio made up $778 mil­lion or 61% of to­tal con­sol­i­dated rev­enues. The port­fo­lio’s rev­enues were 23% higher mainly be­cause of the new con­tri­bu­tions of the 97-MW Avion peak­ing power plant and the San Gabriel flex plant.

Rev­enues were par­tially off­set by the slightly lower com­bined dis­patch of Santa Rita and the 500- MW San Lorenzo power plants at 74% as of Septem­ber as against 79% last year.

The to­tal re­cur­ring earn­ings con­tri­bu­tion from First Gen’s nat­u­ral gas port­fo­lio de­creased by $ 9 mil­lion to $ 85 mil­lion largely be­cause of the losses in­curred by the San Gabriel and Avion power plants in the first half of 2017.

San Gabriel did not op­er­ate dur­ing the 20- day Malam­paya out­age in Fe­bru­ary, while all of the gas plants tem­po­rar­ily halted op­er­a­tions af­ter an earth­quake hit Batan­gas in April.

EDC’s geo­ther­mal, wind and so­lar rev­enues ac­counted for $462 mil­lion, or 36% of to­tal con­sol­i­dated rev­enues.

Re­cur­ring at­trib­ut­able earn­ings from EDC, ex­clud­ing First Gen Hy­dro Power Corp., was al­most un­changed at $69 mil­lion de­spite the earth­quake, as the 140-MW Bac­man plant and the 150- MW Bur­gos project reg­is­tered higher earn­ings.

The 132- MW Panta­ban­ganMasi­way hy­dro­elec­tric plants’ rev­enues slipped by 30% to $29 mil­lion, or 2% of First Gen’s to­tal con­sol­i­dated rev­enues.

FG Hy­dro’s rev­enues dropped as its an­cil­lary ser­vice con­tract ex­pired in Fe­bru­ary 2017. As a re­sult, its re­cur­ring at­trib­ut­able earn­ings con­tri­bu­tion was lower by $ 4 mil­lion at $ 9 mil­lion. —

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