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Thursday, February 29, 2024

First Gen’s recurring profit down 13% to P6.6B in first half on Malampaya interruptions

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First Gen Corp. on Friday reported a 13-percent reduction in recurring net income in the first half to P6.6 billion ($128 million) from P7.1 billion ($148 million) in the same period last year.

The company said its natural gas and geothermal portfolios suffered from reduced operating income.

“First Gen’s first-half earnings were affected by fuel availability issues that specifically affected our natural gas, geothermal and wind plants,” said First Gen president and chief operatIng officer Francis Giles Puno.

“We are at the mercy of nature to give us good wind conditions as was the case last year, but it, unfortunately, was the opposite this year. Our geothermal system was affected by Typhoon Odette in early 2022 and is currently catching up on maintenance activities [as was planned for this year,” he said.

Puno said interruptions at the Malampaya gas field weighed down on First Gen’s natural gas fleet, requiring the company to import more costly liquid fuel.

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“However, we experienced considerably less gas constraints by June, and this has improved dispatch. Moreover, the expected commercial operations of our LNG terminal by next year should ease that further,” Puno said.

First Gen’s natural gas platform reported a 10-percent decline in recurring earnings in the first six months to P5 billion ($96 million) from P5.2 billion ($107 million) in 2021.

Unit 1 of the 97-megawatt Avion power plant experienced unscheduled outages because of turbine damage in December and was brought back to operations in February.

High fuel prices also affected Avion’s margins when it operated in merchant mode.

The 420-MW San Gabriel power plant recognized lower capacity fees because of insufficient gas supplyfrom Malampaya and outage days to address equipment reliability issues.

First Gen said with non-recurring items, the natural gas platform’s attributable net income to parent dropped to P4.8 billion ($93 million) from P5.2 billion ($108 million) in 2021.

The gas platform also paid increased income taxes compared to the previous year.

The geothermal, wind, and solar platform, under Energy Development Corp., suffered from lower wind generation at the Burgos project in the first half, compounded by increased taxes as the income tax holiday of the Burgos project expired in November.

It said that while electricity produced from the geothermal business benefited from higher electricity prices, EDC’s earnings were affected by outages at Bacman and Leyte due to maintenance activities, generation curtailment due to Typhoon Odette and the expiry of power contracts in Mindanao.

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