First Gen books higher P4-B profit in Q1 as shift to clean energy pays off

By Madelaine B.Miraflor

Lopez-led First Gen Corporation (First Gen) has booked higher earnings and revenues during the first three months of the year as its decision to shift to more renewable energy projects "finally pays off", a top official said.

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In a regulatory filing, First Gen said its recurring attributable net income jumped by 28 percent from P3 billion to P4 billion in the first quarter. The company's recurring earnings from its geothermal, wind, and solar platform also surged to P1.4 billion in the first three months of 2019, in comparison to P700 million in 2018 as the Unified Leyte and Tongonan geothermal plants normalized their operations and delivered higher earnings after recovering from the damage in the Leyte site caused by Typhoon Urduja in December 2017.

The hydro platform likewise came in higher at P500 million for the period as it benefitted from higher sales to the Wholesale Electricity Spot Market (WESM) and ancillary services. Lower expenses at the Parent attributable to its deleveraging initiatives further boosted the company’s strong financial results. The company’s natural gas platform recurring earnings of P2.4 billion remained steady versus the P2.4 billion generated last year.

First Gen's net income attributable to equity holders in the first quarter of 2019 was P4.2 billion, a 104-percent surge from the earnings in had in the first quarter of 2018 of P2.0 billion due to the higher electricity sales of its natural gas, geothermal and hydro platforms, foreign exchange gains, and lower deferred income taxes.

“First Gen’s conscious choice to focus on clean, low carbon and renewable energy is paying off as the long term prospects of our platform is looking brighter. Our impressive first quarter results have set the tone for the rest of the year driven by the reliable performance of our plants across our clean energy, low carbon platform," First Gen President and COO Francis Giles B. Puno said.

"We expect natural gas and hydro to continue to deliver stable earnings, while geothermal should continue to outperform as it benefits from the full recovery of the Leyte assets and realizes the effects of its efficiency, resiliency, and cost-saving initiatives," he added.

Meanwhile, First Gen's consolidated revenues from the sale of electricity increased by 14 percent to P28.0 billion, compared to the P23.9 billion) it had in the same period last year. The natural gas portfolio accounted for P17.2 billion, or 61 percent of First Gen’s total consolidated revenues. Their revenues were 12 percent higher in the first three months of 2019 mainly due to higher natural gas prices.

Energy Development Corporation's (EDC) geothermal, wind and solar revenues accounted for P9.4 billion, or 34 percent of total consolidated revenues. From P7.6 billion in the first three months of 2018, EDC's revenues improved by P1.9 billion mainly due to Unified Leyte and Tongonan's recovery after Typhoon Urduja. This was supplemented by higher Bacman, Palinpinon, Nasulo, and Solar Rooftop revenues during the period.

First Gen Hydro Power Corporation, owner of the 132-MW Pantabangan-Masiway hydroelectric plants, also delivered better revenues by 37 percent higher to P1.1 billion, as sales to WESM increased in terms of volume and price.
Moreover, there was an absence of ancillary service sales in the first quarter of 2018 as it waited for its Ancillary Services Procurement Agreement to be approved then. The hydro plants account for 4 percent of First Gen’s total consolidated revenues.