First Gen 9-month income down 12%, but LNG projects still a go

First Gen plants resume operations

First Gen Corporation, the Lopez Group‘s power generation company, suffered a 12% decline in its net income in the first three quarters of 2020 at Php9.6 billion from Php11.3 billion in the same period in 2019, based on a disclosure to the Philippine Stock Exchange.

Recurring earnings for natural gas in the same period went down by 11% to Php6.8 billion from Php7.9 billion last year mainly due to the planned outages and the lower dispatch of the 420 megawatt (MW) San Gabriel and 100 MW Avion natural gas-fired power plants.

In spite of the lower incomes, First Gen has vowed to continue its projects involving liquefied natural gas (LNG). The entry and ready access of affordable LNG supply from other gas-producing countries is a key initiative towards the decarbonization program for the Philippines.

First Gen was recently given clearance by the Department of Energy to build an integrated offshore LNG terminal in Batangas. It has also tapped an Australian contractor for the said project.

“Needless to say, we are a believer in the growth and potential of the country despite the challenges we have all recently undergone,” First Gen President and COO Francis Giles B. Puno said.

Meanwhile, subsidiary First Gen Hydro Power Corporation, owner of the 132-MW Pantabangan-Masiway hydroelectric power plants, generated weaker revenues by Php600 million or 31% less than the Php1.9 billion it had in first nine months of 2019, to Php1.3 billion (US$26 million) in 2020 due to lower sales in terms of volume and price in the Wholesale Electricity Spot Market. The hydro plants account for two percent of First Gen’s total consolidated revenues.

Revenues for First Gen’s indirect subsidiary Energy Development Corporation (EDC) slightly went down to Php3.3 billion in the first three quarters of 2020 from Php3.5 billion in the same period last year. EDC, which focuses on renewable energy platforms such as geothermal, wind, and solar, reported a higher taxable income as it incurred lower operating expenses and lower interest expenses, but was offset by higher tax payments.