EDC net profit surges to P5.74 billion

MANILA, Philippines - Lopez-owned Energy Development Corp. (EDC) more than doubled its net income in the first half of the year to P5.74 billion from P2.69 billion in the same period in 2009, the company said in a statement.

The company attributed the huge improvement in earnings to the 137-percent rise in revenues during the period.

“Combined power plant operations continue to boost our financial performance,” the geothermal leader said.

Among its subsidiaries, First Gen Hydro, the operator of the 122.5-megawatt Pantabangan-Masiway hydroelectric plants, contributed P1.06 billion to the total net income in the first semester.

Income from the 106-MW Mindanao geothermal plants improved to P436.4 million from P343.2 million with the elimination of build-operate-transfer (BOT) fees after the turnover by the government to EDC in June last year.

As a stand-alone entity, Green Core Geothermal Inc. (GCGI), which operates the 305-MW Tongonan 1 and Palinpinon power plants, on the other hand reported a net loss of P260 billion.

“The successful acquisition of Napocor-owned geothermal power plants is an integral component of our forward integration growth strategy,” EDC president and COO Richard Tantoco said.

He said despite investor concerns on the immediate impact of loss steam revenues for the BacMan acquisition, EDC’s purchase of the power plant remains a value-enhancing move for the company.

EDC submitted the highest complying bid for the auction of the 150-MW BacMan plants last April.

It has programmed the rehabilitation of the plants to bring them back to full capacity within 18 to 24 months.

“Complementary to this is our initiative to strengthen our balance sheet by redenominating our loans and smoothening out lumpy maturities,” he said.

He said he is optimistic that the company would continue its performance for the remainder of the year.

“We are confident that we can sustain this momentum for the balance of the year with the continued seamless integration of the newly acquired plants with their fuel source – steamfields that we have been operating for the past three decades,” Tantoco said.

EDC is currently the largest producer of geothermal energy in the Philippines, accounting for 62 percent of the total installed geothermal capacity in the country.

EDC owns and operates the 122-MW Pantabangan-Masiway hydroelectric plants and has investments in wind energy projects in Ilocos and other provinces.