First Gen income rises 4% to $277M

FIRST Gen Corp. reported on Thursday a 4 percent increase in its 2023 attributable recurring net income to $277 million (about P15.40 billion) from $265 million (P14.30 billion) in 2022, mainly due to “record” earnings from its geothermal portfolio.

In a disclosure, First Gen said that subsidiary Energy Development Corp.’s (EDC) geothermal portfolio “delivered record earnings” on higher electricity prices while its parent firm, Lopez-led First Philippine Holdings Corp., benefited from higher interest rates on internally generated cash.

EDC’s recurring earnings rose 24 percent to $119 million (P6.60 billion) in 2023 from $96 million (P5.20 billion) in 2022. It also had fewer purchases of replacement power, while its 150-MW Burgos wind project generated better earnings.

First Gen’s revenues, however, fell 7 percent last year to about $2.5 billion (P137.70 billion) from $2.67 billion (P144.10 billion) in 2022 as “a result of a decrease in revenues across all of the platforms.”

First Gen President and COO Francis Giles Puno described 2023 as “a positive year for First Gen as EDC achieved its highest earnings to date, while FGEN LNG started to commission. The company was likewise declared the highest bidder for the 165 MW Casecnan hydroelectric power plant.”

FGEN LNG, the company’s special-purpose vehicle for the operation of the interim offshore LNG terminal, generated revenues of $8 million but booked a recurring net loss of $20 million in 2023.

It also “booked a receipt of $25 million in non-recurring other income from construction delay claims,” the company said.

The natural gas portfolio accounted for 65 percent of total consolidated revenues, while 32 percent came from EDC’s geothermal, wind and solar plants. The rest came from hydro and First Gen Energy Solutions, its retail electricity supplier.

The natural gas platform’s recurring earnings dropped 5 percent to $184 million (P10.25 billion) last year from $190 million (P10.28 billion) in 2022 on the mixed performances of its related businesses.

First Gen’s four power plants also showed mixed results, with the 420-MW San Gabriel and the 97-MW Avion power plants posting higher earnings, while the 1,000-MW Santa Rita and 500-MW San Lorenzo plants booked lower sales amid higher interest expenses.

The hydro platform’s recurring earnings fell 23 percent last year to $4 million (P212 million) from $5 million (P267 million) in 2022 on reduced electricity volumes sold at its Pantabangan-Masiway power plants as well as low water reservoir levels.

Looking forward, Puno said that the commissioning of FGEN LNG and the company’s acquisition of the Casecnan hydroelectric power plant “should translate to additions to First Gen’s earnings” this year.

First Gen shares on Thursday fell by 1.01 percent to P19.58 each amid a 0.69-percent rise in the benchmark Philippine Stock Exchange index.