Gas business pulls down First Gen earnings in 2020

First Gen Corp. of the Lopez Group posted P13.7 billion in net earnings last year, down 7 percent from the previous year’s P15.4 billion.

This was brought about by a 7-percent decrease in the earnings of its gas business for the year to P9.3 billion (US$187 million) from P10.4 billion in 2019.

The performance of its gas platform was affected by the unplanned outage of the 420 MW San Gabriel power plant. Also, the 100 MW Avion natural gas-fired power plant was affected by low spot market prices, although slightly offset by fresh earnings from the start of its ancillary

service contract in June 2020.

From a recurring attributable net income to parent of P10.1 billion in 2019, the gas platform generated P9.2 billion for 2020.

The Energy Development Corp. (EDC) posted a lower recurring attributable net income to parent of P4.5 billion for the year, while it generated P5.1 billion in 2019, still due to lower power demand.

The hydro platform’s attributable earnings contribution fell by 90 percent, mainly due to lower prices at the Wholesale Electricity Spot Market (WESM), though mildly offset by higher ancillary service sales.

First Gen’s recurring net income attributable to equity holders stood at P12.6 billion last year, 11 percent lower than the 2019 due mainly to lower electricity sales across all platforms.

First Gen’s consolidated revenues from the sale of electricity declined to P91.2 billion last year, compared to P111.8 billion in 2019.

“All of the company’s platforms were affected by the decline in demand brought by the pandemic that resulted in lower power prices,” it said.

The natural gas portfolio accounted for 59 percent of First Gen’s total consolidated revenues. EDC’S geothermal, wind, and solar revenues accounted for 38 percent of First Gen’s total consolidated revenues in 2020. The hydro plants accounted for 2 percent of First Gen’s total consolidated revenues.

The company is still optimistic that this year will turn out better than 2020.

“While we are grateful that First Gen was marginally affected by the decline in power demand resulting from the pandemic, we are still looking forward to a better 2021.

Not only do we expect the country to climb its way up to recover y, but we are also preparing for this by, among other things, commencing the construction of the country’s first LNG terminal next month which puts the Company in a good position for expanding its gas portfolio especially after the recent DOE coal moratorium,” First Gen President and COO Francis Giles B. Puno said.