AboitizPower core net income drops to P13B

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Aboitiz Power Corp. (AboitizPower) said its core net income for the first nine months of 2015 amounted to P13 billion, down 3 percent from a year ago due to lower sales at its Tiwi-MakBan plants and foreign exchange losses.

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The company said the generation business recorded an income share of P9.5 billion or 78 percent of earnings contributions from its business segments, down 12 percent from the same period last year.

It said income in the period was also affected by the full-year impact of the Wholesale Electricity Spot Market (WESM) special payment agreement and the unrealized foreign exchange loss of Therma Luzon Inc. due to the revaluation of its liabilities.

“The generation group’s income contribution should have been higher if not for the expiration of Magat plant’s income tax holiday,” said AboitizPower.

Netting out one-off items, the generation group’s income contribution amounted to P10.4 billion for the period, 6 percent lower than last year.

The company said consolidated net income dropped 8 percent year-on-year to P12.2 billion from P13.2 billion.

The revaluation of consolidated dollar-denominated loans and placements resulted in a non-recurring loss of P805 million against last year’s loss of P209 million, AboitizPower said.

As of end-September, AboitizPower said attributable net generation increased by 9 percent from a year ago to 9,161 gigawatts per hour (GWh) from 8,395 GWh previously.

It said electricity sold through bilateral contracts, which made up 90 percent of total energy sold during the period, expanded by 16 percent to 8,254 GWh. However, spot market sales in the period decreased by 28 percent from 1,266 GWh to 907 GWh.

In terms of capacity, AboitizPower’s attributable sales increased by 5 percent from a year ago — from 1,782 megawatts to 1,866 MW — driven by higher sales from bilateral contracts and ancillary services.

It said improving water levels boosted ancillary sales by 38 percent.

Meanwhile, the power distribution group’s earnings share for the first nine months rose 6 percent from a year ago to P2.6 billion from P2.5 billion. Spearheaded by a 9 percent increase in industrial sales, the group’s total attributable electricity sales rose 7 percent to 3,546 GWh from 3,299 GWh last year.

However, the group’s gross margin in the first nine months fell 3 percent to P1.64 per kWh from P1.68 per kWh last year.

The decline mostly came from Davao Light & Power Company, Inc., which incurred higher direct cost due to the lag in recovery of pass-through charges and the additional cost for running its embedded plant during the period.

As part of its ongoing capacity expansion program, Unit 1 of Davao Coal, with a net sellable capacity of 130 MW, began commercial operations last September 18 while Unit 2 is expected to be commissioned within the first half of 2016.

Balanced mix
The company also said announced that the construction of its 59-MW Negros solar energy project has started.

AboitizPower president and chief operating officer Antonio R. Moraza said the launch of the first unit of the Therma South baseload plant in Davao and the solar venture with SunEdison in Negros Occidental is in line with their efforts to boost their portfolio nationwide with a balanced mix of renewable and non-renewable energy sources.

“The country’s rapidly unfolding growth story fuels our commitment to provide the Philippines with reliable, ample, and reasonably priced power with the least impact on our environment and our host communities,” he said.

AboitizPower recently disclosed that it entered into agreements to explore and develop a potential 2×55 MW geothermal plant with PT Medco Power Indonesia in East Java Province, Indonesia as well as a potential 127 MW hydropower generation project with SN Power AS and PT Energi Infranusantara along the Lariang River in Central Sulawesi, Indonesia.

“We will continue to pursue development and other suitable opportunities, both nationally and abroad. Our hydro and geothermal exploratory activities in Indonesia are strategic opportunities to leverage on our expertise and expand overseas via greenfield development and acquisition,” Moraza said.

SN Aboitiz Power-Magat Inc. also signed a Memorandum of Agreement with the National Irrigation Administration (NIA) for the construction of an 8.5-MW hydroelectric power plant along the Maris Main (South) Canal in Magat.

AboitizPower is the holding company of the Aboitiz Group’s investments in power generation, distribution, retail, and power services.

It is a major producer of Cleanergy, its brand for clean and renewable energy in the Philippines with several hydroelectric and geothermal assets in its generation portfolio. It also has fossil-fired power plants located across the country and owns distribution utilities that operate in high-growth areas across the country.

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