With electricity demand fall due to economic slowdown, the recurring net income of First Gen Corporation had declined 15-percent to P6.7 billion (US$133 million) in the first half of the year versus last year’s P8.2 billion (US$156 million).
The Lopez-led firm said it wasn’t spared by the brunt of the coronavirus pandemic, hence, it attributed the downturn of its profitability to the affliction of the health crisis.
The company added its net income attributable to equity holders was at P6.7 billion (US$133 million), lower by 20-percent from P8.7 billion (US$166 million) a year ago, “due mainly to lower electricity sales across all platforms, though partially offset by lower interest expenses.”
First Gen President and Chief Operating Officer Francis Giles B. Puno said “2020 will prove to be a challenging year for all. This pandemic and its disastrous effect on the economy will give us painful lessons that we must humbly learn from.”
The firm’s consolidated revenues from electricity sales in the six-month stretch had likewise dipped by 15-percent or an equivalent of P10.4 billion reduction to P47.7 billion (US$939 million) from last year’s P58.1 billion (US$1.109 billion).
The natural gas business segment of the company accounted for 61-percent of its consolidated revenues; and turnout had been 17-percent lower in the first semester “mainly due to lower average natural gas prices coupled with a decline in the plants’ dispatch.”
Further, the drop in sales from the gas plants consequentially trimmed the company’s recurring attributable net income to parent firm at P4.5 billion (US$88 million) as against last year’s heftier P5.5 billion (US$105 million).
“The gas plants continued to suffer from lower electricity sales in the second quarter due to the lockdowns,” First Gen said.
The earnings of its subsidiary Energy Development Corporation (EDC) had been flattish at P2.4 billion (US$48 million from January to June this year vis-à-vis US$49 million in the same period in 2019). EDC has massive renewable energy portfolio across technologies – ranging from geothermal, solar, wind and hydropower facilities.
But even for that subsidiary, the Lopez firm indicated that it posted “lower revenues coming from lower electricity prices throughout its geothermal portfolio, offset by lower operating expenses, lower interest expenses and stable demand from customers.”
For the company’s hydro platform, profitability significantly tumbled by 68-percent to P200 million (US$4.0 million) from a heftier scale of P700 million (US$13 million) a year ago.
The income decline from the hydro segment had been “mainly due to lower prices at the Wholesale Electricity Spot Market (WESM), though partially offset by higher ancillary service sales.”