Energy Development Corporation (EDC) reported a net loss of P2.3 billion for the first half of 2011, down from the P5.63B net income posted for the same period last year. EDC president and COO Richard Tantoco said that the net loss was largely due to the onetime P5-B impairment charge for the Northern Negros Geothermal Plant (NNGP) and the P900.0M reduction of steam revenues from Bacman.

In an earlier disclosure, Tantoco said that the impairment charge which is a noncash loss resulted from the scaling down of the plant’s sustainable capacity to five megawatts to 10MW from its previously rated capacity of 49.4MW. The impairment charge will not affect EDC’s ability to declare dividends as the company has over P9B in unrestricted retained earnings. Tantoco also said that measures were being undertaken to right-size the plant.

The decline in revenues of FG Hydro which operates the Pantabangan- Masiway hydroelectric plant and of the forgone Bacman steam revenues following the plant’s acquisition also affected EDC’s income for the first semester. The hydroelectric plants’ lower dispatch for the period coupled with lower Wholesale Electricity Spot Market prices led to the decline in revenue contribution from FG Hydro.

EDC’s recurring net income for the period decreased by 57.8% to P2B from P4.8B posted during the first half of 2010, mainly due to the decrease in revenues from FG Hydro’s electricity sales, absence of steam sales of Bacman and higher operating expenses. The company’s cash and cash equivalents, meanwhile, increased by 77% to P10.9B from the P6.2B posted as of December 31, 2010.

“Our prudent fiscal management continues to boost our credibility to lending institutions and enabled us to fully settle our yen loan which is now just down to less than 1% of our total debts, effectively shielding us from the risks accompanying the volatile Japanese currency,” Tantoco said.