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EDC reports income increase of 27%

EDC reports income increase of 27% Steam pipes at Mount Apo, Mindanao Philippines (source: flickr/penmanila)
Alexander Richter 28 Mar 2010

Philippines' EDC reports increase of net income by 27% to US$162 million.

Reported from the Philippines, “Earnings of listed geothermal developer Energy Development Corp. (EDC) for last year increased by over a quarter due to higher revenues, currency movements, and accounting adjustments brought about by the Renewable Energy law.

In a release today, EDC reported that its core net income last year grew 26.5% to P7.38 billion (US$ 162m) from P5.83 billion the previous year.

“The significant improvement in the core net income is largely attributable to the hike in total revenues, more favorable exchange rates and impact of the RE law on accounting treatment,” the company said.

EDC stated that its revenues last year increased by P2.73 billion due
to electricity sales and drilling services. The company also saw a
turnaround of P9.4 billion in foreign exchange losses in 2008 to a
P1.3 billion foreign exchange gain last year.

EDC said that such gains offset the write-down of P2.9 billion on deferred tax assets arising under the RE law, the P2.22 billion increase in operating expenses mainly due to steam augmentation activities and a P3.1 billion one-time arbitration award in 2008 which reduced expenses and increased income that year.

“Although the one time write down in deferred tax assets affected our
income, it was a necessary step before we can realize the fiscal
benefits afforded by the RE law,” Richard B. Tantoco, EDC president
and chief operating officer, said in a statement.

“The long wait for the law’s implementation is well worth it. With the
assistance of the RE law’s incentives, we will push hard to develop
new geothermal areas in the country and expand what we have,” Mr.
Tantoco added.”

Source: Business World