First Gen Corp. saw its recurring net income fall 11 percent year-on-year in the first quarter to $45 million this year from $51 million last year amid weak prices at the spot market.
In a statement, First Gen said its merchant power plants suffered from lower revenue due to seasonally soft prices at the Wholesale Electricity Spot Market (WESM), driven by the cooler weather.
Even then, the Lopez group unit said it had exceeded its targets as the various subsidiaries secured more off-take contracts and reduced expenses.
Additionally, First Gen said its debt-reduction program had started to pay off with a decline in interest expenses.
“First Gen is optimistic it would catch up in the following quarters, especially during the scorching summer months,” said First Gen president and chief operating officer Francis Giles B. Puno.
Puno noted that First Gen’s natural gas plants provided a reliable back-up to the many aging base-load coal plants operating in the grid.
“We intend to continue the positive changes we have made throughout First Gen for the rest of the year,” he said.
“San Gabriel and Avion are projected to contribute higher to earnings this second quarter,” he added, respectively referring to the 414-megawatt mid-merit plant and the 97-MW peaking plant which are both in Batangas.
Also, First Gen’s consolidated revenue from the sale of electricity inched up by 2 percent quarter-on-quarter to $428 million in the first quarter of 2017 from $420 million in the first quarter-ended last year.
The natural gas plants contributed more than half or 54 percent of consolidated revenues at $233 million. This meant an increase of 2 percent year-on-year thanks to fresh contributions from San Gabriel and Avion.