First Gen profit shrinks 83%

The decommissioning of the 49-megawatt (MW) Northern Negros Geothermal Power Plant owned by affiliate Energy Development Corp. caused First Gen Corp.’s net profit in the first nine months to plummet by 82.6 percent to $11.5 million.

In a disclosure to the Philippine Stock Exchange, First Gen said the P5-billion impairment charge, which was booked following the shutdown of the plant earlier in the year, was a major contributor to the net income decline but not the sole reason for it.

First Gen Hydro Corp., owner and operator of the 132-MW Pantabangan-Masiway hydropower facilities, also registered lower revenue during the period, causing its bottom-line contribution to parent firm First Gen to significantly decrease.

From January to September, FG Hydro’s income contribution to First Gen dropped to only $6.7 million from the $16 million registered in the same period last year. This was attributed to limited water availability and a decline in rates at the wholesale electricity spot market.

The impact of the P5-billion impairment charge was actually softened by lower interest rate expenses due to reduced debt levels and interest rates. First Gen’s borrowing costs dropped 16.9 percent to $66.5 million in the first nine months, from $80.1 million the year before.

During the period, the company made some scheduled loan payments, and bought back significant amount of its convertible bonds. From the issued amount of $260 million, the outstanding amount of First Gen’s bonds is down 73.1 percent to $70 million.—Abigail L. Ho