Ayala-led ACEN Corporation income dipped 68 percent to P405 million in the first quarter this year versus P829.32 million in the same period last year, owing to higher cost in securing replacement power for its customers.
The Ayala firm attributed the earnings drop to “short term headwinds” as it secured replacement power mainly from the Wholesale Electricity Spot Market (WESM) when its South Luzon Thermal Energy Corporation (SLTEC) coal plant had to undergo preventive maintenance shutdown in the early months this year.
“The decline in net income was driven by higher costs of purchased power due to elevated spot market prices during a major preventive maintenance outage of the SLTEC thermal plant,” the company stressed.
In terms of consolidated revenues, ACEN indicated that this climbed by 29 percent to P7.4 billion within January to March this year from P5.713 billion within the same first quarter stretch in 2021.
The uptick in revenues, the company said had been “driven by new operating capacity, including two solar farms each in the Philippines and in India, as well as several wind facilities in Vietnam.” The company’s attributable output went up by 4.0-percent to 1,161 gigawatt-hours in the first quarter.
Cora G. Dizon, chief finance officer and treasurer of ACEN, conveyed that “the company faced significant headwinds in the first quarter from the impact of natural disasters, extended plant outages, and elevated spot purchases.”
Beyond the replacement power purchases, ACEN emphasized that its income downtrend was also “affected by curtailment to the company’s output in the Visayas because of transmission line damage from typhoon Odette (international name: typhoon Rai) and prior damage to a major sub-sea cable.”
The company noted that while most transmission and distribution lines had already been restored, “curtailment is still expected for the 80-megawatt Islasol solar farm until the end of the year, due to reconstruction on the said sub-sea cable.”
The other factor which contributed to the drop in earnings, the Ayala energy firm said, had been the expenses incurred in a one-time buyout of a customer contract.
“Without the impact of these events, the company’s net income would have reached approximately ₱1.6 billion during the period, for a growth of 23% year-on-year,” ACEN explained.
Dizon nevertheless qualified that the power firm is anticipating these issues “to be resolved in the short to medium term, with the full rehabilitation of transmission lines damaged by Typhoon Rai (Odette), and supported by new operating capacity coming online in the next few months.”