By Victor V. Saulon, Sub-Editor
ENERGY Development Corp. (EDC) has secured on Thursday approval from its board of directors to obtain three-year loan facilities with various local banks for a total amount of P11.5 billion, the Lopez-led company told the stock exchange on Thursday.
The loan facilities will be partly used to refinance its $80-million club loan, it said.
Aside from dollar-denominated loan, which translates to around P4.2 billion in the local currency, EDC said it will use the proceeds “to fund a portion of its capital expenditure program, and for other general corporate purposes.”
“These are peso loans so no forex risk,” said Erwin O. Avante, EDC vice-president and head for corporate finance, in a text message.
He also said the loan facilities are targeted to be obtained within the third quarter of this year. EDC — the country’s largest geothermal and wind energy company — declined to disclose additional details of the planned borrowing.
In May, Mr. Avante said EDC had allocated a capital expenditure of P6.1 billion for 2018, around the same as the previous year’s.
He said the company had “growth projects” up until 2014 and 2015, but the outlay had since been for existing operations.
“I think the bigger chunk here is the drilling. We’re looking at drilling I think three wells if I’m not mistaken this year. That’s in the program. That’s over a billion already,” he said.
EDC expects this year’s revenues and profit to be flat, a positive development for the company that ended the first quarter with a double-digit decline in top- and bottom-line figures.
In the first quarter, it posted consolidated revenues of P8.18 billion, down 15% from the level a year ago. Its consolidated recurring net income attributed to equity holders of the parent firm was at P1.81 billion, lower by 44% from a year earlier.
Including non-recurring items, EDC reported a consolidated net income attributable to equity holders of P1.34 billion, or less than half of last year’s P3.09 billion. Net income was down by 54% to P1.5 billion from P3.26 billion, although the company said its financial position remained strong with a cash balance of P14.27 billion.
On Thursday, shares in the company rose 0.77% to close at P5.24 each.