First Gen Q1 net income up almost 18%

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LOPEZ-led First Gen Corp. on Monday said its net income for the first quarter of the year grew by 17.7 percent or $50.5 million.

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In a disclosure to the Philippine Stock Exchange (PSE), the company said its net income attributable to equity holders of the parent rose $7.6 million from the $42.9 million registered in the same period in 2014.

First Gen attributed the improvement primarily to the higher earnings booked by its geothermal subsidiary Energy Development Corp. (EDC) resulting from higher revenues, as well as fresh income contributions from the 140 megawatts (MW) Bacon Manito plant, the 150 MW Burgos Wind Project and the 49.4 MW Nasulo plant.

First Gen Hydro Power Corp. (FG Hydro) likewise posted higher revenues as receipts recorded normalized in the first quarter of 2015. On a recurring basis, net income attributable to the parent was higher by $4.2 million, or 9.3 percent to $49.5 million this year from $45.3 million in the first quarter of 2014, the company said.

This is due to the higher recurring net income contribution of the geothermal and natural gas businesses.

First Gen’s consolidated revenues from the sale of electricity increased by $43.0 million, or by 9.4 percent, to $500 million for the first quarter of 2015 from $457 million for the same quarter last year.

The Santa Rita and San Lorenzo natural gas-fired power plants accounted for $308.2 million, or 61.6 percent, of the total consolidated revenues.

EDC’s revenues accounted for $166.1 million or 33.2 percent, while FG Hydro’s revenues were $23.5 million or 4.7 percent.

The natural gas-fired plants’ combined revenues were up 4.3 percent against the previous year’s $295.5 million due to higher electricity generation, though partially offset by lower gas prices.

Electricity produced was higher as Santa Rita recovered from the damage incurred by its Unit 40 transformer in February 2014. Unit 40 has a capacity of 250 MW out of Santa Rita’s 1,000 MW maximum or nameplate capacity.

In addition, San Lorenzo benefited from its higher Net Dependable Capacity and lower interest expenses.

As a result, the combined earnings of the natural gas-fired plants totalled $29.6 million in
the first quarter compared to $27.6 million in the same quarter last year.

EDC’s geothermal and wind revenues reached $166.1 million, higher by $25.6 million or 18.2 percent, than the previous period’s $140.5 million.

Such increase was mainly due to incremental revenues from the operation of its various growth and rehabilitation initiatives.

FG Hydro’s revenues also grew by $4.5 million to $23.5 million from $19.0 million in the first quarter of 2014 due to the absence of a $5.6 million revenue adjustment in 2014.

As a result, the earnings contribution of EDC and FG Hydro in the first quarter 2015 both increased to $22.9 million and $9.5 million, respectively.

Though earnings increased throughout the portfolio, these were reduced by higher interest expense at EDC due to fresh borrowings in 2014 and 2015, as well as staff and professional fees related to the development of the various growth projects.

“The year is off to a good start. The 150 MW Burgos Wind Project has reached commercial operations and BacMan is fully operational. San Gabriel’s construction is in progress,” First Gen President Francis Giles Puno said.

He said their attention is now focused on bringing Avion to commercial operation in the third quarter so that it can also contribute to the company’s earnings.

“Moreover, we eagerly anticipate the Government’s plan to bid out gas from Malampaya this year in order to secure additional supply for our growth projects,” he added.

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