EDC posts P488M net loss

Energy Development Corp. (EDC), the country’s biggest producer of geothermal power, posted a net loss of P488 million in the first nine months of 2011, a reversal of the P7.6-billion net income a year ago, due to higher operating expenses and foregone steam sales.

In a filing with the Philippine Stock Exchange, EDC reported that the net loss was due primarily to the 57-percent surge in operating expenses to P15.97 billion in the first three quarters from only P10.19 billion in the same period last year. This was attributed to the P5.78-billion full impairment charge from the shutdown of the 49-megawatt Northern Negros geothermal facility this year.

Also contributing to the losses this year were the P1.2 billion in forgone steam sales as the Bacon-Manito facility, which it earlier acquired from the government, underwent rehabilitation; foreign exchange losses of P48.7 million as of September 30; and an increase of P360.5 million in the financial expenses of the company.

However, for the third quarter alone, EDC recorded a 7.7-percent decline in net income to P1.81 billion from the P1.96 billion it posted during the same quarter last year.

Meanwhile, EDC also reported a 5.7-percent drop in total revenue in the first nine months to P18.22 billion from P19.32 billion a year ago due to the absence of steam sales from the Bacon-Manito facility.

Revenue from the sale of electricity contributed P17.7 billion to total revenue, while for the sale of steam was negligible compared with the P1.2 billion generated a year ago. Revenue from drilling services decreased by 10.7 percent to P522.3 million in the first nine months due “to lower drilling days and average exchange rate.”

As of end-September, cash and cash equivalents increased 106.2 percent to P12.7 billion from P6.16 billion as of Dec. 31, 2010.

According to the Lopez affiliate, the increase was mainly accounted for by the P13.35 billion and P3.26 billion in proceeds from the sale of $300 million worth of bonds and a second loan it secured from International Finance Corp., respectively, as well as from the P6.88-billion cash flow from operations.

These increases, however, were mainly offset by P6.7 billion worth of investments in property, plant and equipment, the P4.76 billion worth of prepayments and P1.2-billion settlement of regular long-term debt servicing.