First Gen CorporationFirst Gen Corporation reported recurring net income attributable to equity holders of the parent of $60 million in the first quarter of 2018. This is a 34% or $15 million jump from its $45 million in earnings from the same period in 2017.
The company’s natural gas platform delivered recurring earnings of $46 million versus $19 million previously. Recurring earnings in the geothermal platform earned $14 million in the first three months of 2018, in comparison to $32 million due to damage caused by typhoon Urduja that affected the Leyte site in December 2017. The hydro platform came in slightly lower at $5 million for the period despite the absence of ancillary service sales.
The company’s strong numbers were boosted by lower expenses at the parent company, most of which were a result of deleveraging initiatives.
Attributable net income in the first quarter of 2018 of $40 million was only 4% lower from 2017. The strong showing from the 97-megawatt (MW) Avion peaking plant and the 420-MW San Gabriel flex plant as well as savings in interest expense partly offset unrealized foreign exchange losses and Energy Development Corporation’s (EDC) weak performance in 1Q18.
First Gen’s consolidated revenues from the sale of electricity increased by $28 million or 7% to $457 million compared to $429 million in 1Q17.
The natural gas portfolio accounted for $293 million, or 64% of First Gen’s total consolidated revenues. Their revenues were 26% higher in the first three months-ended 2018 mainly due to higher volumes and spot market prices. The total recurring earnings contribution from First Gen’s natural gas portfolio increased by $27 million to $46 million in the first quarter of 2018 due to a positive reversal from the losses previously incurred by Avion and San Gabriel.
“Even if San Gabriel is currently fully merchant and awaiting the regulatory approval for the power supply contract with Meralco, we still posted a strong turnaround with higher spot market prices in the first quarter of 2018. The gas plants continue to demonstrate their importance to the grid by serving consumers with power needed at critical periods of the day. We continue to progress with the development of our LNG [liquefied natural gas] regasification facility. Recent supply tightness makes it increasingly evident that we cannot afford to not have natural gas in the country’s energy mix,” First Gen president and COO Giles Puno said.
EDC’s geothermal, wind and solar revenues accounted for $136 million, or 30% of total consolidated revenues (see story in May issue).
FG Hydro, owner of the 132-MW Pantabangan-Masiway hydroelectric plants, reported a minor decrease in revenues of $1 million or 7% to $15 million, as its ancillary services contract expired in February 2017. The hydro plants account for only 3% of First Gen’s total consolidated revenues. Consequently, the recurring attributable earnings contribution of $5 million slightly changed.
“We expect the geothermal and hydro platforms to catch up in the coming quarters. EDC’s Leyte site is back to pre-earthquake and typhoon levels while FG Hydro has resumed selling ancillary services since end-March of this year,” Puno said.