First Gen LogoFirst Gen Corporation (First Gen) reported net income attributable to equity holders of the parent of US$95.3 million for the first half of 2015. This was a 7.1% or US$7.3 million decrease from the US$102.6 million it registered in the same period in 2014. The decline was primarily due to the lower earnings booked by its subsidiary Energy Development Corporation (EDC) resulting from the outage of the Tongonan Plant in Leyte, trading losses on the Unified Leyte strip business, higher operating expenses, and typhoon-proofing works. First Gen Hydro Power Corporation (FG Hydro) likewise posted a dip in revenues as the plants suffered from weak spot market prices and a reduction in electricity production caused by lower water availability. The natural gas plants, however, generated higher earnings from higher dispatch and booked insurance claims as they recovered from their previous transformer incidents.
Similarly, recurring net income attributable to the parent was US$6.6 million less, or 7.3%, from US$90.4 million in the first half of 2014 to US$83.9 million in the first half of 2015.
First Gen's consolidated revenues from the sale of electricity increased by US$29.8 million, or 3.2%, to US$965.3 million for the first semester of 2015 from US$935.5 million for the same semester last year.
The Santa Rita and San Lorenzo natural gas-fired power plants accounted for US$587.7 million, or 60.9%, of First Gen’s total consolidated revenues. The natural gas-fired plants’ combined revenues were relatively flat compared to the previous semester’s US$593.0 million. Electricity produced by Santa Rita was higher as the 1,000 MW plant recovered from the damage incurred by one of its transformers in February 2014. This was offset by lower fuel revenues as gas prices were lower in 2015. The combined earnings contribution of the natural gas-fired plants was higher by US$6.9 million at US$67.1 million in the first semester of 2015, as compared to US$60.2 million in the same period last year due to lower interest expenses and the receipt of additional insurance claims last April by the 500 MW San Lorenzo power plant for business interruption and machinery breakdown in 2013.
EDC’s revenues accounted for US$346.0 million, or 35.9%, while FG Hydro’s revenues were US$27.2 million, or 2.8%, of First Gen’s total consolidated revenues.
EDC’s revenues rose by US$36.7 million, or 11.9%, from the previous period’s US$309.4 million. The uptick was mainly due to incremental revenues from fresh contributions of the 154 MW Burgos Projects, the 49.4 MW Nasulo Plant, and the 140 MW Bacon-Manito Plant. Reliability issues at the Tongonan Plant, however, tempered the rise. Moreover, the increase in revenues was offset by trading losses, higher operating expenses and typhoon-proofing works. As a result, the earnings contribution of EDC in the first semester of 2015 declined to US$47.4 million from US$62.4 million.
FG Hydro’s revenues were slightly lower by US$1.7 million from US$28.9 million in the first half of 2014 due to a reduction in average spot market prices and electricity production. As a result, the earnings contribution of FG Hydro registered at US$7.6 million in the first semester of 2015 compared to US$10.7 million in the same period last year.
“Despite the positive contribution of the gas projects, EDC’s geothermal operations suffered reliability issues which we are now addressing. Due to the aging fleet of EDC’s portfolio, we will implement major rehabilitation programs in order to prevent any unforeseen outages going forward.
Moreover, we continue to focus our efforts on bringing Avion to commercial operation in the third quarter of 2015 so that it can augment power available to the grid. San Gabriel’s construction is likewise progressing with all the major components already on-site,” First Gen President Francis Giles B. Puno said.