First Gen earnings up 65% to $221 M

Lopez-led First Gen Corp. grew its net profit by 65 percent last year on the back of strong contribution from gas-fired power plants.

The company disclosed its net income reached $221 million (P11.6 billion) last year compared to the $134 million (P7.5 billion) recorded in 2017.

It also reported a 51 percent rise in recurring income to $243 million (P12.8 billion).

First Gen attributed the increase to the strong contribution of its natural gas business that delivered recurring earnings of $186 million (P9.7 billion) versus $120 million (P6 billion) previously.

First Gen said the positive numbers were also driven by lower interest expenses and higher interest income as a result of the group’s deleveraging and refinancing initiatives.

Savings in interest expense and the receipt of insurance proceeds also offset unrealized foreign exchange losses and higher deferred taxes.

FGen’s latest natural gasfired plant, the 420-megawatt (MW) San Gabriel flex plant benefitted from significantly higher dispatch and revenues as it sold power at attractive prices in the spot market in the first half.

It then sold its full production to Manila Electric Co. (Meralco) under its power supply agreement (PSA) starting June last year.

“2018 was an exceptional year for First Gen as we concretized value from the sizable investment made for the modern 42-MW San Gabriel natural gas-fired power plant. This was made in anticipation of the market’s increased electricity demand and the need for new cost-competitive power supply to the grid,” First Gen president and COO Francis Giles Puno said.

“The 1,500 MW Santa Rita and San Lorenzo natural gasfired plants continued their reliable performance incorporating the technical upgrades we have invested in over the years that effectively reduced the power rates to consumers,” he said.

“We are now focused on firming up our future direction with the LNG regasification terminal investment in partnership with Tokyo Gas,”

Meanwhile, revenues from the sale of electricity increased by 16 percent to $2 billion (P103.8 billion).

Of the total, the natural gas portfolio accounted for 63 percent or $1.24 billion (P65.1 billion) or an increase of 20 percent year-on-year.

Geothermal, wind and solar revenues under Energy Development Corp. (EDC), accounted for 33 percent or $652 million (P34.2 billion), which rose nine percent primarily driven by the full recovery of the Unified Leyte plants after the impact of Typhoon Urduja that resulted in higher sales volume.

“We expect EDC to continue to outperform this year,” Puno said.

FG Hydro, the owner of the 132-MW Pantabangan-Masiway hydroelectric plants, reported higher revenues of $36 million (P1.9 billion), which cornered two percent of the overall revenues.