First GenFirst Gen Corporation reported recurring net income attributable to equity holders of the parent of $115 million (P5.9 billion) in the first semester of 2018. This is a 35%, or $30 million jump from its $85 million (P4.3 billion) in recurring earnings from the same period in 2017.
The natural gas platform delivered recurring earnings of $88 million (P4.5 billion) versus $51 million (P2.5 billion) previously. The natural gas platform’s performance offset the soft performance of the other platforms. First Gen’s strong numbers were likewise boosted by lower interest expenses due to its deleveraging initiatives.
Attributable net income in the first semester of 2018 of $85 million (P4.4 billion) was 46% higher from 2017. The solid showing from the 97megawatt (MW) Avion peaking plant and the 420-MW San Gabriel flex plant, as well as savings in interest expense, offset unrealized foreign exchange losses and the renewable energy businesses’ lower earnings in 1H 2018.
First Gen’s consolidated revenues from the sale of electricity increased by $85 million, or 10%, to $939 million (P48.4 billion) compared to $854 million (P42.6 billion) in the first half of 2017. The natural gas portfolio accounted for $599 million (P30.9 billion), or 64%, of First Gen’s total consolidated revenues. Their revenues were 22% higher in the first half of 2018 mainly due to higher volume sales and spot market prices.
“The gas portfolio thrived during this period, especially San Gabriel and Avion that have been able to achieve remarkable turnarounds this year as they delivered muchneeded power to the grid. For the second half of 2018, San Gabriel shifts to being a contracted provider of electricity to Meralco, allowing it to achieve stable earnings. This contract proves the price competitiveness of natural gas-fired power versus coal-fired power even at baseload and more so at midmerit levels of dispatch,” First Gen president and COO Francis Giles Puno said.
Energy Development Corporation’s (EDC) geothermal, wind and solar revenues accounted for $291 million (P15.0 billion), or 31% of total consolidated revenues (see related story on this page).
FG Hydro, owner of the 132MW Pantabangan-Masiway hydroelectric plants, reported a slight decrease in revenues of $2 million, or 7% to $23 million (P1.2 billion). This was due to the absence of ancillary service sales in the first quarter of 2018. The hydro plants account for only 3% of First Gen’s total consolidated revenues. Consequently, the recurring attributable earnings contribution of $5 million (P0.2 billion) is less than last year’s $7 million (P0.3 billion).
“EDC and FG Hydro are expected to perform better in the second half of 2018 as they both have recovered from each of their respective setbacks. 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.