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Thursday, February 29, 2024

First Gen reports flat net profit, to hike capital

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First Gen Corp. of the Lopez Group said Friday net income in 2017 was flat at $163 million due to calamities and weak spot market prices for its hydro and geothermal facilities.

“The flat earnings growth does not reflect the many noteworthy achievements of 2017 that strongly positions the company to develop a cost-competitive and flexible platform. This platform is best prepared to both enable and address a low-carbon energy future,” First Gen president and chief operating officer Francis Giles Puno said in a disclosure to the Philippine Stock Exchange.

First Gen’s energy portfolio consists of clean and renewable energy power projects, such as natural gas, geothermal, hydro and solar.

The board of First Gen, meanwhile, approved an increases in the capital stock to P11.6 billion from P8.6 billion to provide “increased financial flexibility.”

The company said it would create 300 million series “H” preferred shares with a par value of P10 per share to implement the increased capital stock.

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First Gen, meanwhile, reported an attributable net income of $134 million in 2017, down $29 million from a year ago due to the one-time effect of break funding costs.

The funding costs were incurred as a result of a $500-million refinancing of the 1,000-megawatt Santa Rita power plant’s long-term debt in May last year, as well as premiums paid for the partial buyback of the US dollar-denominated bonds of First Gen and Energy Development Corp.

These were in addition to EDC’s earthquake- and typhoon-related expenditures.

Puno is optimistic of prospects for this year with the recent approval of First Gen’s ancillary service contracts.

“2018 is already off to a good start as the San Gabriel contract with Meralco has already been signed, while the ERC has provisionally approved FG Hydro’s Ancillary Service contract,” Puno said.

“San Gabriel and Avion have been running at high dispatch levels and benefitting from higher electricity prices at the Wholesale Electricity Spot Market as a number of older base load plants are going through maintenance in preparation for the hot summer months. Moreover, EDC’s Leyte projects are on their way to a full recovery,” he added.

First Gen’s consolidated revenues from the sale of electricity increased nine percent to $1.708 billion from $1.561 billion in 2016. 

The natural gas portfolio accounted for $1.036 billion, or 61 percent, of First Gen’s total consolidated revenues.

Natural gas revenues rose 24 percent in 2017, mainly due to the full-year contributions of the Avion and San Gabriel plants and higher fuel sales of the Santa Rita and the 500-MW San Lorenzo power plants.

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