First Gen: Geothermal improvements yet to boost bottom line

Lopez-led First Gen Corp. remains optimistic it will end the year in positive territory despite a weaker first-half performance due to its geothermal business.

Francis Giles Puno, First Gen president and chief operating officer, said the group’s geothermal operations were trying to secure a foothold amid the drop in power prices and volumes sold, coupled with higher expenses. “Our production is lower simply because our steam, we’re still doing the drilling today. So, the costs are being borne today,” he told reporters recently.

The official said First Gen would continue to invest in geothermal energy as it sees the segment bouncing back in the future.

READ: First Gen profit down 10% on weaker geothermal biz

By next year, Puno said the geothermal business can even record growth as its operations would be boosted by 83 megawatts (MW) of new geothermal plants slated for completion this 2024.

Energy Development Corp. (EDC), the group’s all-renewable energy arm, has a power capacity of 1,464.5 MW, accounting for almost 20 percent of the country’s installed renewable energy capacity. Its primary source of power is geothermal.

Puno said the company’s natural gas, particularly the 420-megawatt San Gabriel power plant in Batangas, was also a bright spot for First Gen.

Hydropower plants to recover

“We’ve been lucky with San Gabriel. Despite an intervention, San Gabriel was able to make up about the same as if it was contracted,” he said. First Gen’s supply contract with power distributor Manila Electric Co. expired early this year.

The official also expects hydropower plants to recover with the end of the summer months. The group became the official owner of the 165-MW Casecnan Hydroelectric Power Plant in Pantabangan, Nueva Ecija after it won the auction conducted by state-run Power Sector Assets and Liabilities Management Corp.

In the first half, First Gen saw its attributable recurring net income reach $150 million, 10-percent lower than last year’s $167 million.

Revenues in the period also dipped by 0.7 percent to $1.278 billion from the previous $1.287 billion. Breaking down, First Gen generated the bulk or 67 percent of its top line from its natural gas portfolio; 30 percent from EDC’s geothermal, wind, and solar capacities; and the remaining from hydroplants. INQ