Alsons’ net profit tumbles in 2017 to million due to finance charges

The swelling finance charges incurred during full-year of 2017 had drastically brought down the consolidated net income of Alsons Consolidated Resources Inc. (ACR) to R103 million from a healthier pace of R636 million in 2016.

The company noted that interests and other charges levied on its project finance loans reached the gigantic level of R1.2 billion last year, rising by 39percent from R865 million in 2016.

ACR stressed such had been mainly due to “interest on the project loan for Sarangani Energy Corporation’s (SEC) first section that was fully recognized as an expense only in 2017.”

The company emphasized that “prior to the start of SEC-1 operations in April, 2016, interest was capitalized as part of project cost.” The first phase of its Sarangani coal-fired power plant is at 105-MW capacity; while the next phase is also of the same installed capacity.

Notwithstanding the one-off and non-recurring item that had been cast on its financial books last year, the Alcantara firm indicated that gross profit had risen 13-percent to R1.93 billion last year, 13-percent up from R1.70 billion in 2016.

Additionally, its operating income climbed 19-percent to R1.89 billion last year from the 2016 turnover of R1.17 billion.

In terms of revenues, this had been up slightly to R6.51 billion from the previous year’s R6.38 billion, that was excluding the R719.1 million of non-recurring revenue logged in that same year.

Despite the full-year income decline, the company pointed out that it is on track on its way on to advancing into completion its ongoing core projects.

“We are well on schedule with the three key projects that will add three more power facilities to our portfolio, deliver 225.1 additional megawatts to our customers, and help fuel the growth of Mindanao’s economy,” Robert F. Yenko, chief finance officer of ACR has noted.

The Alcantara firm said phase 2 of the SEC plant at 105MW capacity is already anticipating to kick-off commercial operations by the first quarter of 2019. For the two-unit power facility, the company and its partners forked out capital outlay of about US$600 million.

Another one on its power generation portfolio that is advancing is the 15.1MW Siguil hydropower project, also in Sarangani province. That particular venture commanded an investment cost of R3.7 billion.

The company’s other coal plant in San Ramon, Zamboanga City for another 105MW capacity is targeted on stream by year 2021, hence, further beefing up its power capacity to 588MW in the next three years.