First Gen profit up 75% to $72M in 1st semester

First Gen Corp., the country’s largest Filipino-controlled independent power producer, reported a net profit of $72 million in the first semester of 2007, up 75 percent compared to the same period in 2006, the company said in a statement.

The increase was primarily driven by the income contribution from the company’s most recent acquisition, the 112-megawatt (MW) Pantabangan/Masiway hydroelectric complex, the higher dispatch of the natural gas-fired plants, and higher non-recurring income.

“The first half financial and operating results for 2007 have been exceptional. Not only was net income significantly higher than last year’s, it also puts us ahead versus our budget. Pantabangan/Masiway earned the company $17 million this semester. The gas plants, the 1,000-MW Santa Rita and 500-MW San Lorenzo, enjoyed the highest dispatch levels in the grid. Bauang Private Power has also been dispatched due to some supply constraints in the grid, and realized lower interest expenses and foreign exchange gains because of the early repayment of its outstanding debt. Though the results have been strong, we realize that the jump in earnings was also helped by some non-recurring gains of about $12 million,” First Gen vice-chairman and CEO Peter D. Garrucho Jr. said.

First Gen’s consolidated revenues from its sale of electricity rose to $516 million, up 16 percent. The increase was primarily due to the successful operations of Pantabangan/Masiway, higher net dependable capacity of each of the gas plants due to the completion of its first power augmentation project, and higher dispatch in comparison to last year’s. Dispatch was significantly higher in 2007 with Santa Rita and San Lorenzo averaging 79 percent and 92 percent, respectively, compared to 75 percent and 76 percent, respectively, in the first half of 2006.  Pantabangan/Masiway’s average dispatch year-to-date was 59 percent.

Also notable was the net decline in First Gen’s consolidated liabilities of $92 million, despite the new borrowing of $77 million in 2006 from the Power Sector Assets and Liabilities Management Corp. (PSALM) for the acquisition of Pantabangan/Masiway. Aside from its scheduled payments of debt amounting to $96 million, Santa Rita prepaid $84 million worth of liabilities last February. The gas projects’ borrowings now total $430 million, down 53 percent from the original $906 million. Hydropower plant Pantabangan/Masiway, on the other hand, made its first debt payment to PSALM of $8 million last May. Further, First Gen affiliate Bauang is now debt-free after prepaying its 144-A notes.

With a substantial increase in profit and an even stronger balance sheet, First Gen’s board meeting also declared a P2.50 dividend per share. This is equivalent to approximately 50 percent of the company’s 2006 recurring net income.  Record date has been set at Sept. 7, 2007, while payment date is on Sept. 14, 2007.