First Gen Corporation reported increased revenues from the sale of electricity in the first semester of 2022 at P65.7 billion ($1,273 million), a 21% positive change of P14.8 billion ($219 million) from P50.8 billion ($1,054 million) in the previous year. The higher revenues were derived from electricity sales attributed to elevated fuel and Wholesale Electricity Spot Market (WESM) prices.
The natural gas portfolio accounted for 65% of First Gen’s total consolidated revenues while 31% came from Energy Development Corporation’s (EDC) geothermal, wind and solar plants. The remaining 4% balance came from the hydro plants.
The company, however, reported a 13% reduction in recurring net income in the first half of 2022 to P6.6 billion ($128 million) in comparison to P7.1 billion ($148 million) in 2021.
“First Gen’s first half earnings were affected by fuel availability issues that specifically affected our natural gas, geothermal and wind plants. We are at the mercy of nature to give us good wind conditions as was the case last year, but it unfortunately was the opposite this year,” said First Gen president and COO Giles Puno.
“Our geothermal system was affected by typhoon Odette in early 2022 and is currently catching up on maintenance activities (as was planned for this year). As for the natural gas fleet, it was weighed down by gas interruptions at the Malampaya field that required us to import more costly liquid fuel. However, we experienced considerably less gas constraints by June and this has improved dispatch. Moreover, the expected commercial operations of our LNG terminal by next year should ease that further,” Puno added.
The natural gas platform reported a 10% decrease in recurring earnings for the first six months of 2022 to P5.0 billion ($96 million) from P5.2 billion ($107 million) in 2021. With nonrecurring items, the natural gas platform’s attributable net income to parent decreased to P4.8 billion ($93 million) for 2022 from P5.2 billion ($108 million) in 2021. The gas platform also paid increased income taxes compared to the previous year.
The geothermal, wind and solar platform, under EDC, suffered from lower wind generation at the Burgos project in 1H22 compounded by increased taxes as the income tax holiday of the project expired in November 2021.
EDC’s recurring and attributable earnings at P1.9 billion ($37 million) for the first half of 2022 were 20% lower than its recurring income of P2.3 billion ($47 million) and 19% lower than its attributable income of P2.2 billion ($46 million) last year.
The hydro platform’s contribution to First Gen’s recurring and nonrecurring earnings was at P0.4 billion ($9 million) for the first semester of 2022 from P0.3 billion ($6 million) last year. The 132-megawatt PantabanganMasiway power plants generated higher operating income from its sales contract with Meralco, though it occasionally suffered from more costly replacement power purchased from WESM. Merchant sales declined, though counterbalanced by higher selling contract prices.