Napocor tightens belt, sees P75-B loss this year

The National Power Corp. (Napocor) is aiming to trim its projected P75-billion loss this year due to its continued belt-tightening measures, a Napocor official said.

"We hope that our net loss will be lower than the projected P75-billion net loss for 2003," Napocor senior department manager for finance Lorna Dy said.

Dy said during the first nine months, the state-run power firm recorded a net loss of about P48 billion, P10 billion less than the projected losses for the period.

The Napocor official said the power firm is continuing its belt-tightening activities to reduce losses.

However, Napocor expects its net loss to increase by 51 percent to P113 billion in 2004, from the projected P75 billion this year.

The losses would have been higher were it not for the expected proceeds from the new rates approved by the regulators under the long-run avoidable cost (LRAC), the operational budget cuts and efficiency in collections.

According to Napocor president Rogelio Murga, the state-run power firm will realize some P9 billion proceeds from LRAC rates next year.

Murga said the company is also expecting a P2-billion decrease in operational costs as a result of its cost-cutting measures.

The Napocor official added another P2 billion will also be raised through the aggressive collection efforts of the company’s receivables from a customers.

At the same time, Dy said Napocor will need P165 billion for net financing requirement next year. This amount will include allocation for capital expenditures.

The power firm will need at least $1 billion for debt service and another $1 billion as payments for the amortization of the capacity fees to its independent power producers (IPPs) for 2004.

Napocor allots about $1 billion for debt servicing every year. Of this amount, $500 million is for principal and another $500 million for interest payment.

Napocor has maturing debts amounting to about $500 million this year. The bonds that were issued by the power firm for the past years formed a major portion of these maturing obligations.