Bad weather drags down EDC’s bottom line

Energy Development Corp. is anticipating a flat growth in full-year net income and revenue this year as it reported drops of 15 percent and 54 percent, respectively, in the first quarter.

“We expect (net income) to be about P8 billion, just about the same as last year,” EDC vice president Erwin O. Avante said in a briefing.

In 2017, the renewable energy company reported a net income of P7.7 billion and P33.2 billion in revenue.

For the first quarter of 2018, EDC’s consolidated revenue fell to P8.1 billion from P9.6 billion, which the company blamed on the effects of bad weather.

At the same time, net income dropped to P1.5 billion from P3.2 billion.

“Our results for the first quarter were dominated by the impact of Typhoon Urduja that hit Leyte island, site of our biggest geothermal business unit, in December,” EDC chief financial officer Nestor H. Vasay said in a statement.

“Generation volume was lower by about 40 percent in Leyte compared to first quarter of 2017, and we continued to incur recovery expenses,” Vasay said.

Even then, he said EDC was now at “90 percent of the return-to-service activities” in Leyte, and was targeting to complete its program by the third quarter, Vasay added.

“Though our financial predictability initiatives took a step-back due to the two natural calamities that hit us last year, our stable financial footing allowed us to continue making the necessary investments on plant resiliency, operational reliability, and efficiency,” Vasay said, also referring to last year’s earthquake.

“We are confident that our activities fleet-wide to increase our operational efficiency and to mitigate our key risks—particularly in contracting our capacity -—will help us offset some of the foregone revenues from the impact of last year’s earthquake and Typhoon Urduja,” Vasay said.

In a briefing, EDC president Richard Tantoco said the company was investing P400 million in ramping up the disaster resiliency and operational reliability of its assets in Leyte alone.

“This is four times the usual amount that invest for resiliency,” Tantoco said.

For this year, EDC has earmarked P6.1 billion in capital expenditures, including P1 billion for a drilling program that involves three wells in Leyte.