First Gen records lower profit, flat earnings in 2017

First Gen plants resume operations

First Gen Corp. had a lower profit and flat recurring earnings in 2017 following the effect of the earthquake in Leyte that affected its geothermal and hydroelectric platforms and weak spot market.

The company’s recurring net income attributable to equity holders of parent of $163 million in 2017.

If non-recurring items are removed, the attributable net income is at $134 million, $29 million lower than 2016’s.

The company’s performace was attributed to the one-time effect of break funding costs incurred as a result of a $500 million refinancing of the 1,000-megawatt (MW) Santa Rita power plant’s debt in May.

It also had premium payments for First Gen and unit Energy Development Corp.’s (EDC) partial buyback of US-Dollar dominated bonds.

The company also had earthquake and typhoon related expenses as Leyte was struck with natural calamities last year. First Gen’s hydroelectric platform suffered from weak spot market prices.

Meanwhile in revenues, First Gen recorded a nine percent increase from the sale of electricity from $1.71 billion to $1.56 billion.

The company’s natural gas portfolio accounted for 61 percent, while EDC’s geothermal and solar revenues accounted for 37 percent. First Gen Hydro Power Corp only contributed two percent.

“The flat earnings growth does not reflect the many noteworthy achievements of 2017 that strongly positions the company to develop a cost-competitive and flexible platform. This platform is best prepared to both enable and address a low-carbon energy future,” First Gen president and COO Francis Giles Puno said.

First Gen said that it’s gearing up its core business to strengthen its lead position in developing a low-carbon energy future for the country.

The company sees an improved performance after closing power contracts for its assets, including higher spot market prices.

“2018 is already off to a good start as the San Gabriel contract with Meralco has already been signed, while the ERC has provisionally approved FG Hydro’s Ancillary Service contract,” Puno said.

The company also looks to participate in the government’s plan in making the country a trading and trans-shipment hub through the development of a liquefied natural gas (LNG) terminal.

“First Gen is also progressing with the site preparation of its LNG regasification terminal to be located in its First Gen Clean Energy Complex in Batangas. The LNG facility will ensure the continued supply of natural gas for all of its gas-fired power plants,” Puno said.