EDC expects surge in revenues from BacMan unit coming online

EDC expects surge in revenues from BacMan unit coming online Bacon-Manito geothermal power plant, Philippines (source: First Gen Corp.)
Alexander Richter 9 May 2012

Philippine Energy Development Corp. (EDC) expects a surge in revenues from the Bacon-Manito geothermal power plants coming online again this year.

Philippine news are writing about that Energy Development Corp. (EDC) sees significant increase in earnings this year with one of its shuttered geothermal power plants expected to run for the entire year albeit at a fraction of its total generating capacity.

Richard B. Tantoco, EDC president, said profitability should improve over the P615 million ($14.5 million) the company earned last year as one of the generating units of the Bacon-Manito (BacMan) geothermal power plants has gone on stream.

“Ultimately, one of the things this year is BacMan will run for average of about one quarter kasi one unit of BacMan running now,” Tantoco said.

The second largest geothermal company in the world, EDC suffered a drop in its profit to P615 million ($14.5 m) last year from P4.4 billion ($103 million) in 2010 because of repair and rehabilitation work on the BacMan facility and the shutdown of the company’s power plant in Negros.

EDC, which operates the steam field in Sorsogon and Albay where the BacMan plants are located, had to rehabilitate the 130-megawatt power complex after government privatized the facilities in 2009.

As a result, the company had to absorb P1.2 billion ($28 million) in foregone steam field revenues.

The facilities are expected to resume complete commercial operations by the third quarter of this year.

The company’s 49-megawatt Northern Negros geothermal plant, on the other hand, was closed because of deteriorating steam output. EDC suffered a P5 billion ($118 m) impairment loss as a result of the plant’s shutdown.

“Today we are reviewing technologies available [for Northern Negros]” that would involve the transfer of the facility, Tantoco said.

Besides the projected contribution of the BacMan power complex, EDC expects revenues to increase this year with the supply contracts signed with the electric cooperatives, Tantoco added.

Citing analysts’ reports, he said the company should pocket between P6.8 and P7.0 billion ($160-165 m) this year.

For 2012, EDC has programmed a capital expenditure of P20 billion, which will be sourced from internally-generated funds. Of the total amount, P6 billion ($142 m) has been allocated for its planned 86-megawatt Burgos wind project.

The balance will go to the BacMan rehabilitation, acquisition of two new geothermal exploration rigs, drilling of new wells and funding for the transfer of the Northern Negros plant to Nasulo in Southern Negros.

“We have two adjacent wells that are drilled over 45 megawatts [in Nasulo] but installed was only 20 megawatts,” Tantoco said.

Abroad, the company will pursue geothermal projects in Chile, Peru and Indonesia, he added.”

Source: Interaksyon