First Gen income down 13% in H1

Published August 12, 2022, 4:33 PM

by Myrna M. Velasco

Owing to disrupted fuel supply in its gas-fired power plants due to the depleting state of the Malampaya gas field, the recurring net income of First Gen Corporation in the first half decelerated by 13 percent to P6.6 billion ($128 million) from a rosier financial outcome of P7.8 billion ($148 million) in the same period last year.

On revenue stream, the company specified that this was up by 21-percent to P65.7 billion ($1.273 billion) compared to the leaner P50.8 billion ($1.054 billion) a year ago.

“The higher revenues are derived from electricity sales attributed to elevated fuel and Wholesale Electricity Spot Market (WESM) prices,” First Gen said.

As emphasized, the natural gas portfolio of the company accounted for 65-percent of its total consolidated revenues; while 31-percent came from Energy Development Corporation’s (EDC) geothermal, wind, and solar plants; and the balance of 4.0-percent from its hydro assets.

Overall though, First Gen’s bottom line still skidded because of downtrend in the income contribution of its profit-drivers – mainly its natural gas platform as well as its subsidiary Energy Development Corporation.

“Both of the company’s largest contributors, the natural gas and geothermal portfolios, suffered from reduced operating income,” the Lopez-led power firm stressed.

According to First Gen President and COO Francis Giles B. Puno, the company’s earnings within the January-June stretch “were affected by fuel availability issues that specifically affected our natural gas, geothermal, and wind plants.”

In particular, it was noted that income from its gas platform declined by 10-percent within the first half to P5.0 billion ($96 million) from P5.2 billion ($107 million) last year.

The company qualified that with non-recurring items, the natural gas platform’s attributable net income to parent had likewise been down to P4.8 billion ($93 million) in this year’s first semester from P5.2 billion (US$108 million) within the same period in 2021.

Additionally, Puno stated that “we are at the mercy of nature to give us good wind conditions as was the case last year, but it unfortunately was the opposite this year.”

By the same token, he asserted that the geothermal facilities of its subsidiary-EDC had been whipped by typhoon Odette, and these are still “currently catching up on maintenance activities -as was planned for this year.”

The attributable recurring earnings of EDC had been at P1.9 billion ($37 million) within the six-month period, which had been 20-percent lower than its recurring income of P2.3 billion ($47 million); while its hydro assets logged slight hike in earnings to P400 million ($9.0 million) from year ago’s P300 million ($6.0 million).

On the company’s gas-fired power fleets, Puno said these were “weighed down by gas interruptions at the Malampaya field that required us to import more costly liquid fuel.”

He, nevertheless, shared that “we experienced considerably less gas constraints by June and this has improved dispatch,” adding that when the company’s liquefied natural gas (LNG) import terminal will finally reach commercial operations next year, the dilemma of shackled gas supply can finally be eased.