ENERGY DEVELOPMENT Corp. (EDC) posted P1.35 billion in third quarter net income attributable to the parent firm’s equity holders, down P45% from P2.46 billion in the same period last year, it told the stock exchange on Wednesday.
For the nine-month period, EDC registered P5.97 billion, lower by 19% compared with P7.37 billion a year ago, its financial report submitted to the stock exchange showed. The company attributed this to a drop in reported revenues combined with lower proceeds from insurance claims, and premiums paid for the early redemption of dollar-denominated bonds.
Net of one-off items, EDC recorded a consolidated recurring net income attributable to the parent firm of P6.6 billion, down 6.5% from a year ago as the company factored in the impact of the magnitude 6.5 earthquake that struck Leyte province in July.
“We expected the effect of that major earthquake in July on our third quarter results,” said EDC Chief Financial Officer Nestor Vasay in a statement.
He said the company had successfully brought back to service its damaged units earlier than the original forecast, while strengthening its facilities.
“Our other business units have also been helping in cushioning the financial impact of the earthquake by way of cutting back on their forecasted [operational expense] for the rest of the year,” Mr. Vasay said.
EDC said at the time the earthquake, its Leyte business unit, the largest of the company’s operating units, was generating at almost 540 megawatts (MW) of energy. It said all major units had since been brought back to service except for two 60 MW units in its Mahanagdong geothermal plant.
During the nine-month period, consolidated revenues hit P24.6 billion, down 3.1% from the P25.4 billion a year ago.
The Bacman geothermal unit partly offset the reduced revenues from Leyte as its top-line figure rose by P500 million. It also moved to “drastically increase the amount of its contracted capacity,” EDC said, thus cutting its reliance on the spot market.
Mr. Vasay said a recurring initiative in the past two years had been the company’s focus to deliver financial predictability to shareholders.
“Notwithstanding the impact of the earthquake, we’ve seen our efforts to retrofit and improve the reliability of our older assets, increase the proportion of our contracted capacity, and reduce our opex (operating expenses) and financing costs help us start delivering on this target,” he said.
As of September, EDC said its financial position remained strong with cash balance of P13.6 billion. It maintained a comfortable gearing level with consolidated debt to equity of 1.19 times to 1 and consolidated net debt to EBITDA (earnings before interest, taxes, depreciation and amortization) of 2.67 times to 1.
On Wednesday, shares in EDC slipped 0.70% to P5.71 each. — Victor V. Saulon
