Lopez-led First Gen Corp. (FGen) reported a dip in its net income due to its drilling activities in 2024.
In a statement on Friday, March 21, FGen said its attributable recurring net income went down from $245 million, or approximately ₱15.4 billion, in 2023 to $277 million, or ₱14 billion, last year.
This decline was attributed to its drilling operations via FGen’s Energy Development Corp. (EDC), leading to an increase in cash operating expenses (opex).
Throughout last year, FGen was able to reach $2.4 billion, or ₱137.3 billion, in revenues, which is three percent lower than $2.47 billion, or ₱137.7 billion, in 2023.
According to FGen, higher interest expenses were also incurred in 2024, driven by its ₱20-billion loan to buy out the 165-megawatt (MW) Casecnan hydroelectric power plant.
Despite these figures, the Casecnan purchase led to higher profits in the natural gas business, which, in turn, offset the net income decrease.
“The natural gas portfolio accounted for 65 percent of FGen’s total consolidated revenues, while 32 percent came from EDC’s geothermal, wind, and solar plants. The balance comes from the company’s hydro business unit,” it stated.
Furthermore, recurring earnings for the natural gas unit saw a 12 percent spike from $166 million, or ₱9.2 billion, to $187 million, or ₱10.7 billion.
In 2024, the 1,000-MW Santa Rita and 500-MW San Lorenzo power plants raised the company’s income due to opex savings and lower interest expenses.
“Santa Rita fully paid off its outstanding long-term debt in May,” FGen said.
The liquefied natural gas (LNG) terminal also had a larger recurring income, following the terminal fees charged to its natural gas plants.
While these plants helped the company’s financial performance, the 420-MW San Gabriel power plant saw a lower net income, after seeing a drop in its kilowatt-hour (KW) sales due to the expiry of its power supply agreement (PSA) with distribution utility (DU) giant Manila Electric Co. (Meralco) in February 2024. The planned major outage in March factored in the plant’s slower net income.
The 97-MW Avion power plant also observed a drop in its net income, following the costs needed for gas turbine repairs.
“The geothermal power plants under EDC generated lower sales and operating income due to a reduction in electricity sold, and higher operating expenses from steamfield maintenance and workover activities,” FGen noted.
Last year, the Leyte and Negros power plants went on maintenance outages and forced outages, while the geothermal unit posted higher interest expenses from new debt.
FGen’s hydropower contribution to its earnings reached $19 million, or ₱1.1 billion, while Casecnan plant was able to contribute $16 million, or ₱891.6 million.
The 132-MW Pantabangan-Masiway hydro power plants, on the other hand, saw a dip in recurring income to $3 million, or ₱174 million, driven by low electricity sales following low water levels in the reservoir and lower Wholesale Electricity Spot Market (WESM) prices.
Francis Giles Puno, FGen’s president and chief operating officer (COO), shared that the company is looking forward to contributing to the country’s goals in addressing the issue of energy security.
“On the gas side, we will be receiving our seventh LNG cargo since the start of our terminal’s operations in the second half of 2023. We expect LNG supply deliveries in April and May to address the increased electricity demand during the hot summer months,” he said.
“Our gas-fired plants should benefit from the newly enacted Natural Gas Law, but we are reviewing our options for the 1,000-MW Santa Rita power purchase agreement which expires in August,” Puno added.
FGen had also assured its focus to finishing its geothermal drilling works, as it is slated to bring 24/7 baseload renewable energy (RE) power to its rising customer base.