PNOC-EDC nets P8.9B

The PNOC-Energy Development Corp. (PNOC-EDC) posted a net income of P8.9 billion in 2005, PNOC-EDC president Paul Aquino reported over the weekend.

Aquino earlier projected that the company’s earnings would reach between P6 billion and P10 billion in 2005.

PNOC-EDC accounting manager Elvira Punsalan said the exemplary income last year was brought about by improved operating efficiencies and management-initiated cost reduction measures and foreign exchange gains.

Punsalan said of the P8.9 billion earnings, about P4.2 billion were forex gains net of tax due to the depreciation of the yen to the dollar and the appreciation of the peso against the greenback. Most of the loans of the geothermal development firm are yen-denominated.

According to Punsalan, the company’s profitability and efficiency can further be analyzed through the computation of its earnings before interest taxes, depreciation and amortization (EBITDA).

Since its inception in 1976, Punsalan said PNOC-EDC’s EBITDA reached an all time of P11.3 billion in 2005 or an average growth rate of 9.8 percent a year.

With the profitable operations, the company was able to pay an aggregate of P10.1 billion income taxes and plowed back P918 million dividends to the National Government (NG).

The company’s profitable operations also brought in retained earnings of P6 billion up to Dec. 31, 2005. These earnings and its P10 billion capital stock comprise the P16 billion in stockholders equity to date.

Punsalan said the PNOC-EDC’s operation required huge investment outlay. Since inception to December 2005, these investments total P59.6 billion.

The investments were initially funded by the NG through Philippine National Oil Co. (PNOC), the mother firm of PNOC-EDC, by providing P15 million as its initial capital. Since then, the NG through PNOC, has infused an aggregate of P10 billion.

The bulk of the capital investments were largely funded by foreign borrowings. The financing were principally provided for by the International Bank for Reconstruction and Development (IBRD), the financing arm of the World Bank (P14.5 billion; Eurobond (P9.7 billion); Miyazawa (P9.1 billion); Overseas Economic Cooperation Fund (P7.9 billion) JP Morgan Chase (P1.9 billion) and Bank of Tokyo-Mitsubishi (P500 million).

But Punsalan noted that in 2005, the company did not borrow funds as projected through efficient scheduling of payments and aggressive collection efforts.