EDC net profit surges to P10.4B

Energy Development Corp.’s net income surged to P10.4 billion last year, from P615 million in 2011, due mainly to stronger sales and the absence of impairment losses.

In a disclosure to the Philippine Stock Exchange on Tuesday, EDC said it ended 2012 with a 15.6-percent increase in revenue to P28.4 billion from P24.5 billion a year ago.

“This came from increased electricity sales, complemented by the revenue contribution from FG Hydro’s ancillary services. Total expenses, on the other hand, remained controlled despite the increased level of operating activities,” the disclosure stated.

“Given the absence of the one-time P5-billion impairment loss in 2011, pre-tax income from continuing operations showed a large improvement at P11 billion, from P580 million in 2011. EDC’s improved operations allowed a complete bottom line recovery,” the Lopez affiliate said in a statement.

EDC reported an 8.6-percent drop in its cash holdings to P11.4 billion, as the reserves were tapped to fund investment and financing activities during the year, which amounted to P13.7 billion.

Healthy operating cash flows during the year offset the outflows. Net cash flow from operating activities (CFO) reached P12.6 billion in 2012, up by 29 percent year on year.

In the meantime, EDC is issuing bonds to raise up to P7 billion, which will be used to partly finance its planned P32-billion capital spending this year.

Philippine Rating Services Corp. said it assigned a rating of PRS Aaa to EDC’s proposed bond issuance of P5 billion, which has an oversubscription option of up to P2 billion.

PRS Aaa is the highest credit rating on PhilRatings’ long-term credit rating scale. Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong, the credit watchdog said.

EDC also has an outstanding P12-billion bond issuance (of which P8.5 billion will be due in June 2015 and P3.5 billion due in December 2016). PhilRatings announced the maintenance of the PRS Aaa rating for these bonds last December during its annual monitoring process.

PhilRatings noted that EDC’s strong credit position remained even with the planned additional debt issuance.