SPC Power Corp net income down in Q2

MANILA, Philippines - SPC Power Corp. saw its net income drop by nearly half in the second quarter this year on the back of reduced equity earnings from associates and the loss incurred from the termination of the operation and maintenance service contracts (OMSC) with the Power Sector Assets and Liabilities Management (PSALM).

Net income declined 47 percent to P355.3 million from P669.8 million in the April to June period, SPC said in a regulatory filing.

“The steep decline was due mainly to the marked reduction of equity share in the earnings of associates and the loss of income from the termination of OMSC with PSALM that was not fully offset by improved performance of operating units,” the company said.

The filing showed equity share in earnings of associates amounted to P269.3 million, 45.4 percent lower compared with the P493.3 million booked last year.

SPC attributed the decline to lower power generation resulting from scheduled plant maintenance activities, foreign exchange losses from the revaluation of foreign currency-denominated borrowings.

The firm also pointed to the termination of OMSCs with PSALM for the operation and maintenance of the 153.1 megawatt (MW) Naga Power Plant and the 650 MW Malaya Thermal Power Plant last Sept. 25 and Oct. 25, 2014, respectively.

SPC lost to STX Marine Services Co. Ltd. of Korea in the OMSC bidding for the Malaya plant in 2013.

The second quarter results weighed down on the six-month net income to P714.9 million, 20.1 percent lower year-on-year.

The termination of OMSC for the Malaya thermal plant and Naga power plant drove net income contribution from the power generation segment to fall 49.7 percent to P127.3 million from P253 million.

This also slowed down the increase in consolidated revenues in the first six months of the year, which only registered a 3.2 percent increase to P1.287 billion.