Aboitiz Power income tumbles 34% to P4.7B

MANILA, Philippines - Aboitiz Power Corp. posted a 34 percent drop in its core net income to P4.7 billion in the first quarter as the power generation business dwindled 35 percent mainly due to the softening of spot market prices during the period.

The average price of electricity in the wholesale electricity spot market fell 66 percent. However, the adverse impact on earnings was tempered by Aboitiz Power’s lower exposure in the spot market, as it increased the level of its contracted capacity through bilateral agreements.

Cooler climate that prevailed in the first three months of the year resulted to lower demand in electricity. This mainly accounted for the 10 percent reduction in the generation group’s attributable net generation, from 2,418 gigawatts to 2,168 gwh.

Aboitiz Power recorded a non-recurring income of P107 million, down 73.5 percent from P404 million a year earlier due to the revaluation of consolidated dollar- denominated loans and placements.

Wholly-owned unit Therma Marine Inc. booked a non-recurring gain of P348 million during the quarter under review. In March, TMI obtained a favorable ruling on its motion for reconsideration regarding its tariff structure for its ancialliary services contract with the National Grid Corp. of the Philippines (NGCP).

Ancillary services provided by Aboitiz Power’s merchant hydro assets recorded a 311 percent volume expansion, brought about by the higher acceptance of Magat’s nominated capacity and the fresh contribution of the Binga hydropower plant, as implementation of its contract with NGCP only took effect in the third quarter last year.

Moreover, storage capacities of both the Magat and Binga hydro facilities were close to full during the quarter in review, thus enhancing their capability of providing ancillary services.

As of end-March, Aboitiz Power’s attributable capacity was at 2,051 MW, posting a five percent year-on-year increase. The growth was due to the completion of the 42.5-MW Sibulan hydro project and the 26 percent-owned 246-MW Cebu coal project.

Increased volumes and margins likewise resulted to a 107 percent surge in the power distribution group’s income contribution for the first quarter from P219 million to P454 million.

Aboitiz Power’s attributable electricity sales went up six percent to 889 gwh, driven by a nine percent hike in power consumption of the industrial segment, while the residential and commercial sectors posted marginal growth rates of one percent and two percent, respectively.