RASLAG Corp. reported a sharp 89.28% year-on-year drop in net income for the first quarter of 2025, falling to PHP 2.4 million from PHP 22.3 million in Q1 2024, according to its latest SEC disclosure. The steep decline comes despite a 26.16% increase in revenue, underscoring a troubling margin compression for the solar power firm.
The revenue surge—rising from PHP 102.8 million to PHP 129.6 million—was driven by a 69.22% increase in energy production, thanks to the full operations of RASLAG-4. However, gains were eroded by significantly higher costs, including a 54.84% jump in the cost of electricity sold and a 102.55% spike in finance costs.
“PEMC charges rose significantly by PHP 2.7 million (489.48%) due to higher nighttime electricity consumption at RASLAG-4 and RASLAG-3 during the first quarter of 2025,” the company reported. It also cited workforce expansion and interest expenses tied to loans for new plants as key cost drivers.
Professional fees doubled (107.07%), largely due to a one-time payout to Step Asia for facilitating a 2023 VAT refund. Depreciation from new operations and increased salaries for new executives further contributed to the cost uptick.
RASLAG’s key financial indicators reflect the strain: its current ratio fell to 0.38 from 0.44 quarter-on-quarter, and return on equity dropped to 0.05% from 0.50% year-on-year. The company’s interest rate coverage ratio plummeted to 0.13 from 0.80, raising red flags for lenders and analysts alike.
Despite its financial headwinds, the company presses on with expansion. ASLAG is pursuing new solar projects (RASLAG-6 to 8), entering a joint venture with a Singaporean partner for a hybrid energy project, and has executed new power supply agreements with PELCO I and FDC Retail Electricity Sales Corp.
The board also approved the issuance of up to PHP 2 billion in preferred shares via private placement and a PHP 10 million land acquisition for a new switching station—moves that indicate aggressive capital allocation despite thin margins.
What’s your take on RASLAG’s Q1 performance? Join the discussion: How should solar developers balance expansion with financial discipline in today’s energy landscape?
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