EDC profit declines 4% in 2017

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ENERGY DEVELOPMENT Corp. (EDC) posted a net income of P8.8 billion in 2017, down 4% from the previous year, after the twin impact of the typhoon and earthquake that hit Leyte island, the Lopez-led company told the stock exchange.

“Our Leyte unit, which generated almost 45% of our revenues in 2016, was on track for a record year last year until it got struck by two major calamities,” said Nestor H. Vasay, EDC chief financial officer, said in a statement.

“Despite the initial shock from the earthquake last July and from Urduja last December, our team worked hard to successfully restore much-needed electricity to our countrymen in the Visayas region,” he added.

Last year’s attributable recurring net income, from 2016’s P9.2 billion, sent the company’s shares slipping by 0.18% to P5.58 each on Thursday.

EDC, which claims to be the country’s largest geothermal and wind energy company, recorded consolidated revenues of P3.3 billion, down 3% from the previous year’s P3.4 billion after the 6.5 magnitude earthquake in July 2017 and Typhoon Urduja in December 2017.

The company said that although it had been able to restore in July 40% of its pre-earthquake capacity within 10 days, and the remaining areas in the next months, its largest business unit recorded a fall in its revenues.

For EDC’s other business units, the 140-megawatt (MW) BacMan geothermal plant posted an additional P900 million in revenues because of the higher contracted volume, offsetting the lower generation volume of its 112.5-MW and 60-MW Palinpinon power plants.

The 150-MW Burgos wind farm, the country’s largest, posted its highest volume so far, up 16% last year, since it was commissioned in 2014.

Mr. Vasay said EDC had been able to fully contract its BacMan and 49.4-MW Nasulo power plants, allowing the company to cut its exposure to the electricity spot market.

He said the company had bought back nearly $90 million of its dollar bonds in 2017 to help cut its foreign exchange exposure.

“For 2018, we will continue to manage some of these key risks, and will continue to work on our power plant optimization and other efficiency programs,” Mr. Vasay said.

Despite the lower income and revenues last year, EDC said its financial position remained strong with a cash balance of P11.7 billion. It said it had maintained a comfortable gearing level with consolidated debt-to-equity level of 1.11 times and consolidated net debt to earnings before interest, taxes, depreciation and amortization of 2.79 times. — Victor V. Saulon