FIRST GEN Corp. posted a 65% increase in its 2018 net income attributable to the company’s equity holders to $221 million (P11.6 billion), with the added boost from its new gas-fired power plant plus other factors such as lower interest expense, the Lopez-led company told the stock exchange on Wednesday.
The company also recorded a 51% rise in full-year recurring earnings to $243 million (P12.8 billion), largely because of the strong contribution of its natural gas business.
“2018 was an exceptional year for First Gen as we concretized value from the sizable investment made for the modern 420 MW (megawatt) San Gabriel natural gas-fired power plant. This was made in anticipation of the market’s increased electricity demand and the need for new cost-competitive power supply to the grid,” First Gen President and Chief Operating Officer Francis Giles B. Puno said in a statement.
Last year, the gas segment contributed recurring earnings of $186 million (P9.7 billion), up 55% from $120 million (P6 billion) a year earlier. The company reports its financial results in US dollars, which is its functional currency.
“The 1,500 MW Santa Rita and San Lorenzo natural gas-fired plants continued their reliable performance incorporating the technical upgrades we have invested in over the years that effectively reduced the power rates to consumers,” Mr. Puno said.
The San Gabriel plant benefited from significantly higher dispatch and revenues as it sold power at attractive prices in the spot market in the first half of 2018. It later sold its full production to Manila Electric Co. under a power supply agreement that started in June.
First Gen said its numbers were also boosted by lower interest expenses and higher interest income as a result of the group’s deleveraging and refinancing initiatives. The company noted that savings in interest expense and the receipt of insurance proceeds offset unrealized foreign exchange losses and higher deferred taxes.
Consolidated revenues from the sale of electricity increased 17.6% to $2 billion in 2018, from $1.7 billion in 2017. The natural gas portfolio accounted for $1.24 billion, or 63% of the total, as its revenues were 20% higher mainly due strong performance the gas-fired plants.
Mr. Puno said the company is now focused on “firming up our future direction” with the liquefied natural gas (LNG) terminal investment with Tokyo Gas Co., Ltd. The two companies have a joint development agreement to develop the facility through FGEN LNG Corp.
First Gen unit Energy Development Corp. (EDC) accounted for $652 million or 33% of total consolidated revenues, contributing its revenues from geothermal, wind and solar businesses, which increased by about 9% from $595 million.
“Our geothermal platform, through EDC, likewise made a remarkable recovery in the second half of 2018 with the faster-than-expected recovery of its Unified Leyte plants from the outage caused by natural calamities in 2017, coupled with higher sales volume and more attractive selling prices. We expect EDC to continue to outperform this year,” Mr. Puno said.
On Wednesday, shares in First Gen were trading higher by 3.14% at P21.35 each. — Victor V. Saulon