The Energy Development Corp. (EDC) posted a 24 percent increase in its net income in 2016, growing by over a fifth on the back of improved sales in its renewable energy projects and lower operating expenses of its power plants.
The company’s income rose to P9.72 billion from P7.86 billion in 2015, while its core income rose by four percent from P8.8 billion to P9.2 billion.
This was due to the improved performance and lower operating expenses of their Negros Island and First Gen Hydro Business units, EDC said.
The firm’s 150-megawatt (MW) Burgos wind farm’s revenues rose nearly P0.4 billion as it increased its generation capacity from 60 GWh to 260 to 320 GWh in 2015 and 2016, respectively.
EDC’s Mindanao and Palinpinon geothermal power plants recorded revenue increases due to higher sales volume and average contract prices.
Its hydro unit’s revenues also increased by 21 percent on the back of higher sales volume.
The firm’s revenue decreased by P0.1 billion to P34.2 billion due to lower spot market prices due to the Bacman and Nasulo geothermal plants’ uncontracted capacity off-set gains in the overall sales volume.
“The Bacman and Nasulo geothermal plants were amongst the most exposed to last year’s record-low electricity spot market prices. A reported 25 pecent average drop in prices for these plants resulted to a revenue loss of over Php 1.4 billion full-year”, EDC’s chief financial officer Nestor Vasay said.
Vasay said the company has “moved quickly to address and manage the downside from potentially low spot market prices.”
“For this year, EDC will continue with its asset reliability program as it targets to finish the retrofit of the Tongonan power plant and the refurbishment of other generating units in Leyte. As we had been telling our investors, our focus for the past years has been embarking on initiatives to deliver ‘financial predictability’ — some benefits of which we expect to see starting this year”, Vasay said.
The firm took over the Tongonan and Panlipinon plant in October 2009 after winning a bidding by the Power Sector Assets and Liabilities Management Corp. (PSALM)
EDC has also started to address the reliability issues of its Tongonan plant in Leyte to curb revenue losses.
As of December 2016, the company has lined up contracts to cover 100 percent of Bacman’s capacity and nearly 80% of Nasulo’s capacity.