First Gen logs P12.4-B attributable recurring net income

FIRST GEN Corp. ended last year with “flat earnings” of P12.4 billion attributable to equity holders, with more expensive fuel prices offsetting higher electricity sales as power demand recovered to pre-pandemic levels, the company said on Monday.

“First Gen generated higher revenues in 2021 as we saw power demand recover to pre-pandemic levels. Unfortunately, revenue growth was also an effect of higher fuel prices experienced all over the world and the supply restrictions in the grid that reflected in high spot market prices,” First Gen President and Chief Operating Officer Francis Giles B. Puno said in a statement.

“Our gas-fired plants necessarily ran on liquid fuel to ensure adequate supply for the grid. We are working to address gas supply uncertainty and are confident this will be addressed once our LNG (liquefied natural gas) import terminal operates this year,” he added.

The company’s natural gas platform registered 8% more in recurring earnings last year to P9.7 billion from P9.2 billion in 2020.

“The older natural gas-fired plants, the 1,000-megawatt (MW) Santa Rita and the 500-MW San Lorenzo [power plants], reaped the benefits of lower income tax rates under the CREATE Law and lower interest expenses from regular debt service payments,” the company said, referring to Republic Act No. 11534.

The benefits, however, were partially offset by lower operating income from the 420-MW San Gabriel power plant caused by outages and higher replacement power, the company said.

First Gen said that while its 97-megawatt Avion power plant “had its share of plant damage issues in 2021, it still benefitted from high electricity sales in the early part of the year as it supplied the grid with supplemental power during constraint periods.”

Meanwhile, Avion plant’s Unit 2 “was discovered to have incurred a damage in its gas compressor last August after a routine inspection. The unit was quickly replaced and restored to full commercial operation by late October.”

In December, Avion’s Unit 1 was found to have incurred damage. It was brought back to operations by February 2022.

“From an attributable net income to parent of P9.3 billion in 2020, the natural gas platform increased to P9.8 billion (US$199 million) for 2021,” it detailed.

Energy Development Corp. (EDC), meanwhile, shared a P4 billion recurring attributable earnings generated from its geothermal, wind, and solar assets. This is 8% lower than 2020’s recurring income of P4.5 billion.

Although EDC had generating higher revenues, it incurred higher power plant and steam field maintenance expenses last year as it made up for deferred activities from 2020.

“These were partly offset by lower interest expenses and income taxes. The renewable energy company’s attributable net income to parent of P4.3 billion for 2021 was also 18% lower due to extraordinary income from the collection of insurance claims in 2020,” it said.

First Gen’s hydro platform’s recurring earnings contribution climbed to P180 million in 2021 from P70 million in the previous year.

“The 132.8-MW Pantabangan-Masiway power plants generated higher revenues as the commencement of its contract with Meralco (Manila Electric Co.) were augmented by merchant sales. The increase was slightly offset by higher expenses due to replacement power costs,” the company said.

The Lopez-led company recorded consolidated revenues of P106 billion from electricity sales, 18% higher than the P91 billion in the previous year. This consists of 60% natural gas revenues; 35% EDC’s geothermal, wind, and solar revenues; and 5% hydro plant revenues.

First Gen shares at the local bourse dropped a peso or 3.85% to close at P25 apiece on Monday. — Marielle C. Lucenio