First Gen income surges 51% as gas-fired plants find stable market

Francis Giles Puno

First Gen Corp. recorded a 51-percent jump in recurring earnings, reaching $243 million (about P12.8 billion) in 2018 from $161 million the year prior.

The Lopez group firm attributed the increase mainly to the strong contribution from its gas-fired power plants in Batangas.

First Gen also benefited from lower interest expenses and higher interest income as a result of the group’s debt payment and refinancing initiatives.

Further, savings in interest expense and the receipt of insurance proceeds—related to recent natural calamities that caused damaged to geothermal power pants—offset unrealized foreign exchange losses and higher deferred taxes.

The company’s natural gas-based business contributed recurring earnings of $186 million, up 55 percent from $120 million.

First Gen’s newest gas-fed plant, the 420-megawatt San Gabriel facility, enjoyed significantly higher dispatch and revenues as it sold power at attractive prices in the spot market in the first half of 2018.

In June, San Gabriel began to sell its entire output to Manila Electric Co. under a power supply agreement.

Francis Giles Puno, company president and chief operating officer, said 2018 was “exceptional” for First Gen as it saw in concrete terms the impact of its sizable investment in San Gabriel.

“This was made in anticipation of the market’s increased electricity demand and the need for new cost-competitive power supply to the grid,” Puno said.

“We are now focused on firming up our future direction with the LNG (liquefied natural gas) regasification terminal investment in partnership with Tokyo Gas,” he added.

First Gen’s consolidated revenues from the sale of electricity increased 16 percent to P103.8 billion from P86 billion in 2017.

EDC’s renewable energy portfolio generated higher revenues in 2018, primarily driven by the full recovery of the typhoon-affected Unified Leyte plants, which resulted in higher sales volume.