First Gen Improves Recurring Net Income To P7.1B, Up 11%

First Gen Corporation (First Gen), the Lopez Group‘s power generation company, concluded the first half of 2021 with an 11% improvement to Php7.1 billion (US$148 million) in recurring net income attributable to equity holders from the operations of its 3,495 MW clean, low-carbon, and renewable portfolio.

Photo Insert: San Gabriel Combined-Cycle Natural Gas-Fired Power Plant

The company benefited from higher electricity sales and prices, as well as lower interest expenses and taxes due to the recently enacted CREATE law. First Gen had Php6.7 billion (US$133 million) in recurring earnings from the same period in 2020.

“Power demand bounced back to pre-pandemic levels despite the limitations brought about by the persistently slow recovery of the economy. Brownouts experienced in the second quarter of 2021 highlights the importance of keeping our portfolio properly maintained and running.

We are steadily progressing with constructing the country’s first LNG terminal for delivery in 4Q2022. We are also working to deliver more power projects across our portfolio despite the uncertainty surrounding the market and its accompanying business risks,” First Gen President and COO Francis Giles B. Puno stated.

The natural gas platform delivered a 21% increase in recurring earnings for 1H21 to Php5.2 billion (US$107 million) from Php4.5billion (US$88 million) in 1H20. The 97 MW Avion power plant enjoyed higher electricity sales as it supplied the grid with supplemental power during constraint periods while the other natural gas-fired plants reaped the benefits of lower income tax rates under the CREATE Law.

These were slightly offset by the 420 MW San Gabriel power plant’s lower generation due to repair work that was completed in the first quarter of the year. From an attributable net income to parent of Php4.5 billion (US$88 million) in the first semester of 2020, the gas platform increased to Php5.2 billion (US$108 million) for 1H21.

Energy Development Corporation (EDC) contributed recurring attributable earnings from its geothermal, wind, and solar platform amounting to Php2.3 billion (US$47 million) as of June 30, 2021, only 3% lower in comparison to the Php2.4 billion (US$48 million) it earned in 1H20. EDC incurred higher power plant and steam field maintenance expenses and foreign exchange losses in 1H21.

These were offset by lower interest expenses and income taxes. The renewable energy company’s attributable net income to parent of Php2.2 billion (US$46 million) for the first six months of 2021 was hardly changed from the same period in 2020.

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