First Gen, EDC report surge in profits

MANILA, Philippines—The Lopez-led First Gen Corp. saw a surge in its net income attributable to parent to $147 million in the first nine months of 2012 from only $10.1 million a year ago due to the improved performance of its subsidiaries and affiliates.

In a filing with the Philippine Stock Exchange, First Gen attributed this increase to the higher earnings contribution of its associates Energy Development Corp., currently the country’s largest geothermal producer, and FG Hydro Power Corp. (FG Hydro), the project firm which owns the 132-megawatt Pantabangan-Masiway power plants.

Also contributing to the earnings surge was the higher income from subsidiaries First Gas Power Corp. and FGP Corp., which operates the 1,000 MW Santa Rita and the 500 MW San Lorenzo natural gas-fired power plants, respectively; as well as the deferred income tax and lower variable operation and maintenance expenses.

The higher income, however, was  partly offset by the increased administrative expenses of First Gen due to the additional expenses related to the acquisition of the non-controlling, 40-percent interest of the BG Group in the two natural gas plants in Batangas, among others.

First Gen reported that its total revenues for the first nine months of 2012 rose by 15.2 percent to $1.179 billion from $1.023 billion a year ago.

The bulk of the revenues or $1.07 billion came from electricity sales.

Meanwhile, In a separate filing with the PSE, geothermal producer EDC  said that it posted a net income of P8.6 billion in the first nine months of 2012, a turnaround from the P488-million net loss it incurred a year ago.

EDC reported that net income attributable to equity holders stood at P7.1 billion during the same period, from a net loss of P670.2 million last year.

Total revenues for the nine-month period ending September 2012 rose by 20.5 percent to P21.95 billion from the P18.22 billion it posted in the first nine months of 2011.

According to EDC, the company’s improved financial performance in the first three quarters of the year could be attributed mainly to higher electricity revenues of its subsidiaries and the absence of the P5-billion impairment loss on the property, plant and equipment of the 49-megawatt Northern Negros Geothermal power facility, which was recognized in June 2011.

NNGP was shut down last year due mainly to a mismatch in the geothermal resources in the area and the capacity that can be generated by the facility. The equipment will be moved to another area within the island that can support a higher generation capacity, while a smaller facility may be put in place of the NNGP.

Revenues from the sale of electricity alone rose by 21 percent to P21.4 billion in the first three quarters of 2012 from P17.7 billion during the same period a year ago due to the better performance by Green Core Geothermal Inc., the project company managing the 305-MW Palinpinon-Tongonan power plants, and FG Hydro.

The increases in the sales of Green Core and FG Hydro came from the additional power supply contracts signed in December 2011 and provision of ancillary services, respectively.

EDC remains the largest producer of geothermal energy in the Philippines and second in the world next to Chevron. It accounts for 62 percent of the country’s total installed geothermal capacity. It has obtained geothermal concessions in Chile and Peru.