Alternergy FY24 profit: P130M (+240%)

Alternergy [ALTER 0.83 ?1.2%; 425% avgVol] [link] reported an FY24 net income of P130 million, up 240% from its FY23 net income of P38 million, thanks to a 60% jump in gross revenues “particularly from ALTER’s operating assets”. Most notable of these is the Palau Project plant that started operations in January 2024 and posted P87 million in revenues in 6 months of operations. Some of its existing solar plants reported higher production thanks to higher “irradiation” (fancy way of saying “sunlight”). ALTER mentioned that it has five projects under construction that it hopes will contribute an additional 242 MW of capacity to ALTER’s portfolio by the end of 2025. ALTER is one of the PSE’s hottest stocks over the past month. It’s up 22% in September, up 8% year-to-date, and up 4% over the past year. Despite its recent performance, ALTER is still trading down 35% from its March 2023 IPO price of P1.28/share. ALTER is owned by Vince Pérez, the former head of the Department of Energy.

MB BOTTOM-LINE:  Mr. Pérez has shown great competence at raising funds (both equity through the IPO and debt through its green bonds) and developing projects within the Department of Energy’s auction framework. That broad competence is what has me so curious about the restructuring that ALTER is doing now to move all of its renewable energy projects into subsidiary holding companies, segregated by renewable energy type (solar, wind, hydro). As a former corporate lawyer, I know there are many reasons why companies rearrange their internal holdings in this way. It opens up opportunities to sell investment stakes in the umbrella segments, as opposed to the specific projects. It allows ALTER to joint venture with strategic investors at the power type level rather than just at the baseline project level, which might be a way for it to unlock additional funding and know-how. Beyond the rearrangement, though, I’m curious to know if ALTER has any plan to eventually spin off a REIT subsidiary. That might be a ways off, but it has to have come up in long-term planning and I’m starting to get curious about what milestones the company would need to pass for that to be on the mid- or short-term horizon.

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