First Gen reports 35% profit growth

First Gen Corp. saw its recurring net income for the first semester this year surge by 35 percent year-on-year to $115 million from $85 million a year ago, thanks mainly to its natural gas-fired facilities.

The Lopez Group unit said in a statement its natural gas-based business alone accounted for $88 million (P4.5 billion) or 77 percent of total.

Earnings from natural gas assets were 73 percent higher than the $51 million in the first six months of 2017.

The company said the natural gas platform’s performance offset the soft performance of the other platforms.

Also, lower interest expenses as a result of First Gen’s deleveraging initiatives boosted its performance.

Consolidated revenue from electricity sales rose 10 percent to $939 million from $854 million, with the natural gas portfolio contributing about two-thirds or $599 million.

“The gas portfolio thrived during the period, especially San Gabriel and Avion that have been able to achieve remarkable turnarounds this year as they delivered much needed power to the grid,” First Gen president and chief operating officer Francis Giles B. Puno said.

“For the second half of 2018, San Gabriel shifts to being a contracted provider of electricity to Meralco (Manila Electric Co.) allowing it to achieve stable earnings,” Puno said. “This contract proves the price competitiveness of natural gas-fired power versus coal-fired power even at baseload and more so at mid-merit levels of dispatch.”

On the other hand, Energy Development Corp.’s (EDC)— which contributed 31 percent or $291 million to total consolidated revenues—saw an 8-percent drop in revenue mainly due to the damage sustained by Unified Leyte and Tongonan plants due to a typhoon in December 2017.

FG Hydro, which owns the 132-megawatt Pantabangan-Masiway hydroelectric plants, also reported a 7-percent drop in revenues at $23 million.

“EDC and FG Hydro are expected to perform better in the second half of 2018 as they both have recovered from each of their respective setbacks,” Puno said.

“EDC’s Leyte site is back to pre-earthquake and typhoon levels, while FG Hydro has resumed selling ancillary services since end-March of this year,” he added.