First Gen profit falls 38% on EDC losses, typhoon damage

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Listed energy conglomerate First Gen Corp. said net profit in 2013 fell 37.8 percent to $118.1 million due to losses incurred by its unit Energy Development Corp. (EDC) and damage to facilities caused by Super Typhoon Yolanda (Haiyan) last year.

But the company remains optimistic about its prospects for 2014, saying that several projects are in the middle of construction.

In a statement, First Gen said net income last year dropped by $71.7 million from $189.8 million in 2012 due to lower earnings booked by EDC and Yolanda-related losses.

“The reduction was mainly due to the lower earnings booked by EDC as a result of its unrealized foreign exchange losses, and the loss from assets damaged by Typhoon Haiyan,” First Gen said.


“Earnings were further reduced by reduced sales from the Wholesale Electricity Spot Market [WESM] ancillary services of First Gen Hydro Power Corporation [FG Hydro], and by the fire at the main transformer of San Lorenzo’s Unit 60 [which has a nameplate capacity of 250 MW],” it added.

On the other hand, it said consolidated revenues for electricity sales went up by 7.5 percent to $1.9 billion from $2 billion in 2012, while income from gas-fired plants declined by seven percent from $1.4 billion in 2012.

“EDC’s geothermal revenues were 1.6 percent lower than the previous period’s $556.5 million. Though there was a decrease in revenues from the effect of [Yolanda] on the Unified Leyte and Tongonan plants, this was almost entirely offset by higher sales volume from its subsidiaries Green Core Geothermal Inc. and BacMan Geothermal Inc.,” First Gen stated in its disclosure.

“However, unrealized foreign exchange losses from the restatement of its outstanding foreign loans arose because of the peso depreciation which, together with the loss on damaged assets resulting from the typhoon, negatively affected the bottom line,” it added.

Other than the EDC earnings drop and assets lost to Yolanda, FG Hydro’s lower income also dragged down net earnings for the parent company—decreasing revenues by 47.1 percent from the $112 million recorded in 2012.

“Despite the difficulties in 2013, First Gen is optimistic about its prospects for 2014. We are currently in the middle of construction for several projects, which include the 87-megawatt wind farm in Burgos, the 40-MW Nasulo geothermal project, and the 414-MW San Gabriel natural gas project,” First Gen president Francis Giles Puno said.

“We also hope to include the 100-MW Avion natural gas project to that list soon. Moreover, San Lorenzo’s Unit 60 is back in commercial operation. EDC has restored Unified Leyte to its pre-Haiyan operating capacity, while BacMan Unit 1 [along with Unit 3]is already operating,” Puno added.

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