First Gen Corporation reported a 32% increase in net income attributable to the parent to $102.6 million from $77.7M for the first half of 2014. The rise was primarily due to the higher earnings of subsidiary Energy Development Corporation (EDC) from its 130- megawatt Bacon-Manito (Bacman) and 106-MW Mindanao power plants and unrealized foreign exchange gains.
On a recurring basis, net income attributable to the parent was $90.3M, lower by 3.2% than last year’s $93.2M due to higher interest and project development expenses for the company’s growth projects.
First Gen’s consolidated revenues from the sale of electricity decreased by $49.1M, or by 5.0%, to $935.5M for the first half of 2014 from $984.6M. The Santa Rita and San Lorenzo natural gas-fired plants (the First Gas Plants) accounted for $593.0M, or 63.4%, of the total consolidated revenues. EDC’s revenues, which include those of First Gen Hydro Power Corporation, accounted for $338.3M, or 36.2%%, of the total.
The First Gas Plants contributed $58.4M to the company’s attributable net income for the first semester of 2014, higher than the previous year’s $42.5M.
EDC’s revenues were 4.2% higher than the previous period’s $328.1M. Its revenues grew by $13.7M mainly due to the electricity generated by the Bacman and Mindanao power plants. Unrealized foreign exchange gains of $8.4M further boosted net income. EDC contributed $75.9M in attributable earnings for the period from $52.8M in 2013.
First Gen’s earnings were, however, partially reduced by higher interest expense at both the parent and EDC due to fresh borrowings in the second half of 2013, as well as expenses related to the development of the Avion and San Gabriel natural gas-fired power plants. “Our portfolio delivered respectable numbers despite minor setbacks. Bacman generated electricity at full capacity for a few months but sustained some damage due to typhoon Glenda. They are currently undergoing repair and we expect it to be operational in the second half with two new turbines from Japan.
“The Santa Rita and San Lorenzo gas plants are now delivering at full capacity with the replacement of the transformers of Unit 40 and Unit 60. We are also expecting delivery of a spare transformer in September to reduce possible downtime in the future. Though we are currently incurring higher development expenses in pursuing our growth projects, the new 150-MW wind farm in Burgos, the 97-MW Avion and the 414- MW San Gabriel natural gas projects will start contributing higher revenue growth for First Gen in 2015 and 2016,” First Gen president Francis Giles Puno said.