PH energy firms brace for mixed H2 performance

Analysts forecast that energy firms will experience varied financial outcomes in the latter half of the year, driven by fluctuations in demand and the operational launch of several new energy projects, potentially affecting revenue streams.

In a report by Business World, Globalinks Securities and Stocks, Inc. head of sales trading Toby Allan C. Arce said that energy demand has remained strong due to economic recovery and boosted industrial activity. 

However, China Bank Securities Corporation research associate Andrei G. Soriano pointed out that power generation and distribution capacity are expected to decrease, especially for firms without new capacity, due to the rainy season’s traditionally lower energy demand. 

Soriano added that generation companies with access to the spot market might experience a decline in revenue since spot prices are projected to fall. 

Alternatively, power companies introducing new capacity may see year-on-year growth in profitability. 

Meanwhile, Seedbox Securities, Inc.’s equity trader Jayniel Carl S. Manuel noted that some energy firms may benefit from lower borrowing costs due to a recent rate cut by the Bangko Sentral ng Pilipinas (BSP). 

The central bank recently implemented a 25-basis-point cut, lowering the benchmark rate to 6.25%, which could boost financing for new projects and improve operational efficiencies. 

Some energy companies have already reported mixed earnings for the second quarter of 2024, with ACEN Corporation declaring a 61.5% increase in attributable net income to P3.57 billion, owing to the implementation of new solar and wind farms and reduced expenditures.

For Manila Electric Company (MERALCO), attributable net income rose by 31.3% to Php 12.84 billion, boosted by higher sales volume and increased plant availability.

In contrast, Aboitiz Power Corp. reported a 10% decline in attributable net income to Php 9.26 billion. 

Semirara Mining and Power Corporation reported a steep 40.6% drop in attributable net income to Php 6.05 billion as coal and energy prices fell. 

Meanwhile, First Gen Corporation saw a 2.5% drop in its attributable net income to USD 75.26 million, citing higher expenses and lower contributions from some units.