First Gen 1H income rose to P9B

First Gen plants resume operations

First Gen Corporation (First Gen), the clean and renewable energy arm of the Lopez Group, reported a 30% increase to Php 9 billion in their recurring income for the first half of this year. 

“We hope to carry over the good performance of the first half in the next six (6) months. We are looking forward to a number of significant milestones that are expected to happen for the remainder of the year,” First Gen President and COO Francis Giles B. Puno said in a statement. 

Totaling Php 9 billion, a notable rise from the previous year’s Php 7 billion, the Energy Development Corporation (EDC) played a pivotal role in this growth. The increase was primarily connected to improved operating income driven by higher electricity prices.

The energy firm also revealed a revenue surge of Php 71 billion in the initial half of 2023, indicating a Php 736 million rise from the previous year’s Php 66 billion during the same timeframe. This is due to the elevated natural gas and Wholesale Electricity Spot Market (WESM) prices. 

The natural gas portfolio accounted for 63% of First Gen’s total revenues while 34% came from EDC’s wind, geothermal, and solar plants, and the remaining two percent is from the hydro plants of the company. 

Despite this, the natural gas platform experienced a five percent decrease in recurring earnings for the first six months of this year from $96 million to $91 million. 

The 1,000 megawatts (MW) Santa Rita and 500 MW San Lorenzo Power Plants also took a hit as their net income decreased due to the increase in interest expenses and depreciation costs. However, the 420 MW San Gabriel Power Plant and 97 MW Avion Power Plant reaped higher recurring earnings because of the availability of both plants and also due to lower fuel costs.

Meanwhile, EDC’s recurring and attributable earnings for the first semester were 106% higher than that of last year, from Php 2 billion to Php 4 billion. The geothermal power plants that are also under EDC reaped higher recurring earnings due to higher electricity prices. 

In addition, EDC had fewer purchases of replacement power due to its higher generation. The 150 MW Burgos Wind Project benefited from a better wind regime this year. 

The hydro platform’s contribution to the earnings of First Gen also decreased by 41%, from Php 440 million to Php 278 million as the 132 MW Pantabangan-Masiway Power Plant reduced the volume of electricity it sold because of the transfer of its supply contract to EDC and lower reservoir levels. 

The drop in electricity sales was partly compensated by a rise in WESM volumes sold, reduced replacement power purchases, and elevated market prices. The decrease was also slowed down by cost savings in administrative expenses and increased interest income.

Puno added that the company is looking forward to the establishment of newer projects this year, such as the commercial operations of their first LNG terminal, the start of construction of pump storage expansion in Lake Aya at the Pantabangan-Masiway Hydroelectric Plants in Nueva Ecija which will offer 100 MW and the closing and turnover of the 165 MW Casecnan Hydroelectric Power Plant which was purchased last May from Power Sector Assets and Liabilities Management Corporation (PSALM).