Aboitiz Power Corp. said its net income in the first half declined 10 percent from a year earlier to P8.9 billion as revaluation adjustments on dollar-denominated loans weighed on earnings.
The company said the revaluation of consolidated dollar-denominated loans and placements resulted in a non-recurring loss of P143 million in the first half compared to last year’s one-time gain of P323 million.
Adjusting for this one-off, Aboitiz Power’s core net income for the first half amounted to P8.2 billion, down by 5 percent from a year ago. Earnings per share stood at P1.09.
“Power continues to be an important business for us the despite various challenges we faced in the period,” said Erramon Aboitiz, chief executive officer of AboitizPower.
As the country’s economy grows, Aboitiz said they remain committed to boosting their portfolio nationwide with a balanced mix of renewable and non-renewable energy sources, “keeping in mind our responsibility to provide the Philippines with reliable, ample, and reasonably priced power with the least impact on our environment and our host communities.”
On a year-to-date basis, the generation business accounted for 79 percent of earnings contributions from AboitizPower’s business segments, recording an income share of P6.4 billion for the first six months, down 15 percent from last year.
Netting out one-off items, the income share of AboitizPower’s generation business amounted to P6.6 billion for the period, 9 percent lower than last year.
As of end-June, AboitizPower’s attributable net generation rose by 3 percent year-on-year, from 5,555 gigawatts per hour (GWh) to 5,709 GWh.
Electricity sold through bilateral contracts, which made up 88 percent of total energy sold during the period, expanded by 7 percent to 5,025 GWh, which was in line with the company’s efforts to reduce its exposure to spot market sales.
Consequently, spot sales decreased by 21 percent from a year ago to 685 GWh from from 863 GWh.
In terms of capacity, higher sales through bilateral contracts and ancillary services resulted in a 2 percent increase in AboitizPower’s attributable sales from 1,766 MW in the first half of last year to 1,795 MW in the first half of this year.
This was due to SNAP Benguet and Therma Mobile’s increase in capacity sales, which more than offset the decline in the capacity sales of the Tiwi-MakBan plants during the period, the company said.
Volume of ancillary sales in particular improved by 18 percent as water levels saw an improvement during the period as compared to the year before.
The power distribution group’s earnings share for the first half grew by 20 percent, from P1.4 billion to P1.7 billion.
Total attributable electricity sales increased 10 percent year-on-year from 2,122 GWh to 2,338 GWh.
The increase was driven by the sales growth registered by Davao Light, VECO, Subic EnerZone, as well as the fresh contribution from LiMA EnerZone, which was acquired in June 2014.
Meanwhile, the group’s gross margin during the period was largely unchanged at P1.57 per kWh.
In the first six months of 2015, the group’s average price for its energy sales decreased by 26 percent compared to the same period last year. This was mainly due to the 28 percent decrease in the average selling price of the group’s bilateral sales as fuel costs continued to decline.
Meanwhile, the average rate for ancillary services went down by 10 percent year-on-year due to the implementation of the Binga plant’s new contract for ancillary services toward the end of February 2014.
In June 2015, the company began commercial operations of its 14-MW Sabangan run-of-river hydroelectric plant.