MANILA, Philippines - Energy Development Corp. (EDC), the country’s largest geothermal energy producer, reported a net income of P1.81 billion in the third quarter of 2011, slightly lower than the P1.96 billion in the same period last year.
In a statement, EDC said this has reduced the year-to-date net loss to P488 million, which is primarily attributed to the full impairment of the company’s Northern Negros Geothermal Power Plant (NNGP).
In June 2011, EDC recorded a P5 billion impairment charge, a non-cash expense, as a result of the decommissioning of its 49-megawatt power plant.
The shutdown of the NNGP finally puts an end to the cash drain that EDC had to incur with the plant’s sub-optimal operations.
The lower net income in the third quarter was mainly on account of forgone revenues from the sale of geothermal steam due to delays in the re-commissioning of the Bacman geothermal power plants in the Bicol region. EDC took over the power plants in September 2010. The Bacman power plants are undergoing massive rehabilitation and are expected to achieve commercial operations by end of 2011.
“These are short-term setbacks that we are prepared to endure in exchange for long-term gains. 2011 is a transition year for EDC as we continue to invest heavily in the rehabilitation and upgrading of our power generation assets previously acquired from the government in 2009 and 2010,” EDC president and COO Richard Tantoco said.
Investments made toward the improvement of EDC’s Tongonan and Palinpinon power plants have already started yielding positive results for the company.
The two power plants held under EDC’s wholly-owned subsidiary Green Core Geothermal Inc. contributed an incremental P903 million to the company’s net income through sales in the Wholesale Electricity Spot Market and the signing of 14 new long-term power supply agreements with electric cooperatives in Leyte and Negros.
The Pantabangan-Masiway hydroelectric plants also provided additional revenues amounting to P381 million from the sale of ancillary services.
“With the sustained strong performance of our Green Core and Pantabangan assets for the balance of the year, we are confident that we will end this year’s full-year operations with positive results,” Tantoco added.
EDC is the world’s largest pure-play geothermal company and the Philippines’ leading producer of geothermal energy accounting for 61 percent of the country’s total installed geothermal capacity.
As a fully-integrated geothermal company, EDC’s primary business spans from geothermal steam production to power generation.
EDC is actively pursuing 280 MW of domestic expansion opportunities and international concessions in Indonesia and Chile.