Aboitiz Power, partners to infuse P44 billion to capital expenditure

CEBU, Philippines – Aboitiz Power Corporation (AP) together with its partner companies is set to infuse an additional P44 billion in capital expenditure (capex) this year, whether or not the economy recovers.

AP alone will spend around P33.4 billion of the total capex for this year, excluding the share of its different partners in different generation plants.

 Majority or P26 billion of the investments that will be infused by the company this year will be used for construction or rehabilitation of renewable energy acquired plants, like Tiwi Makban and Ambuklao-Binga.

During the AP 2009 Stockholders Meeting held yesterday at the Cebu City Marriott Hotel, the company’s president and chief executive officer (CEO) Erramon I. Aboitiz said that the prevailing conditions in the Philippine power industry allow for enormous opportunities for the company’s growth.

“AP will pursue this ‘once in a lifetime’ opportunity of building a portfolio of assets, that will be both competitive in long term and complementary with each other by continuing to participate in the privatization of targeted PSALM generating assets and by developing Greenfield projects where opportunity exists,” Aboitiz said.

Taking into account the projects that are currently under construction, the rehabilitation of Ambuklao-Binga, Tiwi Makban, Sibulan and Cebu Coal, total capital expenditure for these projects is expected to reach P61 billion, which will be funded via project finance loans and equity infusions by AP and its partners. AP is investing roughly P17 billion for its share of equity.

AP ended 2008 with a recurring net income of P4.7 billion, up by 38 percent from the previous year’s P3.4 billion. Consolidated revenues grew by eight percent from previous year, reaching P12.2 billion, with increase coming mainly from its 2007 asset acquisitions.

The publicly-listed Aboitiz controlled firm, reported a total earnings to P4.3 billion, up by four percent from the previous year’s bottomline. This translated to earnings per share of P0.59 percent.

AP reported non-recurring net loss of P331 million due to foreign exchange net losses of P534 million resulting from the revaluation of dollar-denominated loans and placements of the parent company and some of its subsidiaries; and the reversal of a P260 million provision made by an associate company due to an arbitration settlement, and also a P57 million project cost write off.

“APs major highlight in 2008 was winning the competitive bid for the 747-MW Tiwi-Makban geothermal power stations, submitting the highest bid of US$447 million. The facilities, with a sustainable capacity of approximately 462MW, are APs first geothermal power assets, as well as its first base load power facility in Luzon,” Aboitiz said.

The Tiwi-Makban acquisition on the other hand, Aboitiz said is very strategic for AP.

“It is a significant addition to our portfolio of renewable generating assets. With its base load nature, it will bring us closer to our dream of making Cleanergy, our brand for clean and renewable electricity, available for Filipinos,” he said.

“We remain bullish about AP. We remain on track with our strategic initiatives. Our challenge is to seize the extraordinary opportunities that will continue to arise in these periods of change and uncertainty. We do not only have the financial resources and cash flow to fuel our growth, but more importantly, a capable management team who not only understands the power business but is driven by the vision of offering better solutions to our customer,” Aboitiz said.