EDC earnings drop 21% to P4.1 B in H1

MANILA, Philippines — Energy Development Corp. reported lower earnings in the first six months of the year as it reeled from the impact of natural calamities that hit its Leyte geothermal facility in the middle and toward the end of last year.

In a disclosure to the Philippine Stock Exchange, EDC reported a 21 percent decline in its consolidated recurring net income attributable to equity holders of the parent in the first half of the year to P4.1 billion from P5.2 billion in the same period last year.

The company also posted a three percent decline in consolidated revenues to P17.1 billion.

“Our first half results, similar to what we communicated to the market during our Q1 earnings announcement, were largely dominated by the impact of Typhoon Urduja that hit Leyte island, site of our biggest business unit, in December,” EDC chief financial officer Nestor Vasay said.

Vasay said Leyte’s generation volume was down by 18.5 percent in the first six months of the year.

“However, we expect this downtrend to reverse in the second half of 2018, as our major power plants in Leyte are now back in service. We also see our operational efficiency initiatives starting to pay off,” Vasay added.

In contrast, the company’s other units posted higher revenues for the period, led by its Burgos wind project posting a 15 percent rise to P1.66 billion from P1.44 billion in the same period last year, while the Bacman wind facility registered a 10 percent increase to P2.13 billion from P1.95 billion.

EDC said this was a result of its efforts to mostly contract its generation capacity. The company’s financial position remained strong with a cash balance of P16.1 billion.

EDC is the largest renewable energy producer in the country, delivering 1,472 megawatts (MW) of clean renewable energy to the country in the form of hydro, solar and wind power apart from geothermal.

Its 150-MW Burgos wind farm is also the biggest in the country while its almost 1,200 MW geothermal installed capacity accounts for 61 percent of the country’s total installed geothermal capacity.

Earlier this year, the company announced that it is looking to borrow P11.5 billion from various banks to support its financial requirements for the year.

The company also reported that it is spending P6.1 billion this year to boost the reliability, efficiency and resiliency of its power assets, especially those hit by natural calamities.

Of the total capex, the biggest component is allocated for drilling works of three wells in its geothermal asset in Leyte.

EDC also targets to invest heavily in resiliency projects by increasing seismic specifications and landslide mitigation of its assets.