First Gen profit drops 15% on lower power demand

MANILA, Philippines — Lopez-led First Gen Corp. reported a 15 percent drop in its recurring net income in the first quarter on lower demand and higher expenses.

In a disclosure to the Philippine Stock Exchange yesterday, First Gen said its January to March recurring net income amounted to P3.3 billion, lower than last year’s P4 billion.

Meanwhile, its net income attributable to equity holders dropped by 20 percent from P4.2 billion to P3.3 billion due mainly to lower electricity sales across all platforms, though partially offset by lower interest expenses and taxes.

First Gen president and COO Francis Giles Puno said the company was not spared from the impact of the pandemic.

“The lockdown imposed in March has translated to lower electricity demand,” Puno said.

In particular, First Gen’s natural gas-fired power plants delivered a 13 percent decrease in income contribution from P2.4 billion to P2 billion.

The company said the gas platform suffered from lower electricity sales as a result of lower demand with the commencement of the quarantine in mid-March, as well as higher operating expenses as it booked expenses to aid employees and third parties during the period.

Geothermal, wind, and solar platform Energy Development Corp. (EDC) also contributed flat recurring earnings at P1.3 billion as savings in its operating and interest expenses as an outcome of its continuous improvement initiatives tempered the impact of lower electricity sales.

First Gen Hydro Power Corp., owner of the 132-MW Pantabangan-Masiway hydroelectric power plants, registered a 51 percent drop in recurring earnings contribution from P0.5 billion to P0.2 billion mainly due to lower prices at the wholesale electricity spot market (WESM), though partially offset by higher ancillary service sales.

In terms of revenues, First Gen’s electricity sales declined by 10 percent from P28 billion to P24.4 billion.

The natural gas portfolio, which accounted for 60 percent of First Gen’s total consolidated revenues, saw revenues slide by 13 percent mainly due to lower average natural gas prices coupled with a decline in the plants’ dispatch.