First Gen LogoFirst Gen Corporation reported recurring net income attributable to equity holders of the parent of $243 million (P12.8 billion) in 2018. This was a 51%- or an $82-million (P4.6 billion) surge from $161 million (P8.1 billion) in 2017, mainly from the strong contribution of the company’s natural gas business that delivered recurring earnings of $186 million (P9.7 billion) versus $120 million (P6.0 billion) previously.
The company’s attributable net income in 2018 of $221 million (P11.6 billion) was 65% higher from 2017. Its newest natural gas-fired plant, the 420- megawatt (MW) San Gabriel flex plant, benefited from significantly higher dispatch and revenues.
First Gen’s numbers were likewise made better by lower interest expenses and higher interest income as a result of the group’s deleveraging and refinancing initiatives. Savings in interest expense and the receipt of insurance proceeds likewise offset unrealized foreign exchange losses and higher deferred taxes.
First Gen’s consolidated revenues from the sale of electricity increased by $271 million (P17.8 billion), or 16% to $2.0 billion (P103.8 billion) from $1.7 billion (P86.0 billion) in 2017. The natural gas portfolio accounted for $1,240 million (P65.1 billion), or 63% of First Gen’s total consolidated revenues. Their revenues were 20% higher in 2018 mainly due to the aforementioned strong performance of the natural gas plants.
Energy Development Corporation’s (EDC) geothermal, wind and solar revenues accounted for $652 million (P34.2 billion), or 33% of total consolidated revenues.
FG Hydro, owner of the 132- MW Pantabangan-Masiway hydroelectric plants, reported higher revenues at $36 million (P1.9 billion). The hydro plants accounted for 2% of First Gen’s total consolidated revenues. The absence of ancillary service sales in the first quarter of 2018 was partially offset by the hydro plants’ higher volume sales to WESM and higher spot market prices in 2018.
Consequently, the recurring attributable earnings contribution of $6 million (P0.3 billion) in 2018 was less than the previous period’s $8.0 million (P0.4 billion).
“2018 was an exceptional year for First Gen as we concretized value from the sizable investment made for the modern 420-MW San Gabriel natural gas-fired power plant. This was made in anticipation of the market’s increased electricity demand and the need for new cost- competitive power supply to the grid. The 1,500-MW Santa Rita and San Lorenzo natural gas-fired plants continued their reliable performance incorporating the technical upgrades we have invested in over the years that effectively reduced the power rates to consumers. We are now focused on firming up our future direction with the LNG regasification terminal investment in partnership with Tokyo Gas.
“Our geothermal platform, through EDC, likewise made a remarkable recovery in the second half of 2018 with the faster-than-expected recovery of its Unified Leyte plants from the outage caused by natural calamities in 2017, coupled with higher sales volume and more attractive selling prices. We expect EDC to continue to outperform this year,” First Gen president Giles Puno said.