Tongonan outage effects First Gen net income
First Gen: "The decline was primarily due to the lower earnings booked by its subsidiary Energy Development Corporation (EDC)"
First Gen Corporation (First Gen) reported net income attributable to equity holders of the parent of USD 95.3 million for the first half of 2015. This was a 7.1% or USD 7.3 million decrease from the USD 102.6 million it registered in the same period in 2014. The decline was primarily due to the lower earnings booked by its subsidiary Energy Development Corporation (EDC) resulting from the outage of the Tongonan Plant in Leyte, trading losses on the Unified Leyte strip business, higher operating expenses, and typhoon-proofing works.
Similarly, recurring net income attributable to the parent was USD 6.6 million less, or 7.3%, from USD 90.4 million in the first half of 2014 to USD 83.9 million in the first half of 2015.
First Gen’s consolidated revenues from the sale of electricity increased by USD 29.8 million, or 3.2%, to USD 965.3 million for the first semester of 2015 from USD 935.5 million for the same semester last year.
EDC’s revenues accounted for USD 346.0 million, or 35.9%, while FG Hydro’s revenues were USD 27.2 million, or 2.8%, of First Gen’s total consolidated revenues.
EDC’s revenues rose by USD 36.7 million, or 11.9%, from the previous period’s USD 309.4 million. The uptick was mainly due to incremental revenues from fresh contributions of the 154 MW Burgos Projects, the 49.4 MW Nasulo Plant, and the 140 MW Bacon-Manito Plant. Reliability issues at the Tongonan Plant, however, tempered the rise. Moreover, the increase in revenues was offset by trading losses, higher operating expenses and typhoon-proofing works. As a result, the earnings contribution of EDC in the first semester of 2015 declined to USD 47.4 million from USD 62.4 million.
“Despite the positive contribution of the gas projects, EDC’s geothermal operations suffered reliability issues which we are now addressing. Due to the aging fleet of EDC’s portfolio, we will implement major rehabilitation programs in order to prevent any unforeseen outages going forward. Moreover, we continue to focus our efforts on bringing Avion to commercial operation in the third quarter of 2015 so that it can augment power available to the grid. San Gabriel’s construction is likewise progressing with all the major components already on-site,” First Gen President Francis Giles B. Puno said.
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Source: Press Release by First Gen