AboitizPower earnings rise 8-fold to P12.7 billion

MANILA, Philippines - AboitizPower Corp. (APC) reported an eight-fold increase in its bottom line in the first half of 2010 to P12.7 billion, from P1.6 billion a year earlier, due to a surge in power sales.

The company told the Philippine Stock Exchage that foreign exchange losses from the revaluation of consolidated dollar-denominated loans and placements resulted to a nonrecurring loss of P156 million, lower compared to last year’s non-recurring net loss of P268 million. Adjusting for this oneoff, the company recorded a seven-fold growth in its core net income from P1.9 billion to P12.9 billion.

In the second quarter alone, its core income grew 325 percent to P5.8 billion while consolidated net income went up 334 percent to P5.3 billion from the same period in 2009.

APC said the movements in the peso-dollar exchange rate also resulted to a P560 million non-recurring loss (versus last year’s non-recurring loss of P159 million) due to the revaluation of dollar- denominated loans and placements on a consolidated basis.

But the company mainly attributed the huge income gain during the period to a surge in power sales. Power sold in the second quarter was 228 percent higher year-onyear, from 781 gigawatt-hours (gwh) to 2,566 gwh. The Tiwi-Makban geothermal power plants, which were turned over to APC on May 26, 2009, had a full three months contribution during the quarter in review.

In addition, fresh contributions from the Pagbilao coalfired power plant, the power barges, one unit of the Sibulan hydropower plant and two units of the Cebu coal-fired power plant augmented APC’s generation volume for the quarter.

The generation business accounted for 96 percent of earnings contributions from APC’s business segments, recording an income share of P12.8 billion for the first semester of 2010, up a substantial 1,121 percent.

Netting out one-off items, APC’s generation business shored in close to P13 billion for the period, 875 percent higher than last year. This was on the back of a 356 percent increase in total attributable power sales from 1,093 gwh to 4,984 gwh.

As of end-June 2010, APC’s attributable capacity was at 2,014 megwatts (MW), posting a 93 percent increase. The expansion was due to the assumption of the dispatch control over the 700-MW contracted capacity of the Pagbilao coal-fired power plant in October 2009, the takeover of the two 100 MW power barges in the first quarter of this year, the start of operations of the 26-MW unit of Sibulan hydropower plant in March 2010 and the two 82 MW units of the 26 percent- owned Cebu coal-fired power plant in February and May 2010.

Electricity sales for the quarter ending June grew 10 percent, from 832 gwh to 912 gwh. Growth was spurred by increases in attributable power consumption of the residential, commercial and industrial customers, recording increases of seven, six and 12 percent, respectively.

Despite the strong growth in electricity sales for the quarter in review, the power distribution business recorded a four percent drop in earnings contribution, from P385 million to P369 million, due to increases in operating expenses.

Davao Light & Power Co., Inc. was forced to run its back-up power plant to provide the much-needed power to the Mindanao grid.