EDC earnings down 19% in Q1

MANILA, Philippines — Lopez-led Energy Development Corp. (EDC) saw lower profits in the first three months of the year due to higher costs of sales and taxes, as well as lower wind power generated and sold.

In its latest quarterly report, EDC said it registered a 19.2 percent decline in its net income  to P2.63 billion this year.

The company attributed the decrease to higher costs of sale and higher net provision for income tax, which was partly offset by the slight increase in revenue.

Recurring net income declined by 20.9 percent  to P2.62 billion.

EDC said its net income is equivalent to 24.2 percent of  the total revenues during the past quarter versus 31.4 percent in the same period last year.

Its revenues increased by 4.8 percent  to P10.89 billion due to the higher wholesale electricity spot market (WESM) prices.

However, energy sales volume decreased by 7.5 percent  to 2,174.4 GWh due to lower generation.

“I think predominantly, Typhoon Odette which curtailed our output until mid-January. Our plants are operating but the transmission lines of NGCP were down. (There was also) lower wind this first quarter compared to same period last year,” EDC chief finance officer CFO Erwin Avante said.

Subsidiary EDC Burgos Wind Power Corp. (EBWPC) saw revenues drop by 42.8 percent to $19.1 million (P1 billion), reflecting lower actual generated sales volume and feed-in tariff (FIT) escalation adjustments.

Meanwhile, Unified Leyte Geothermal Energy Inc. (ULGEI) did not contribute any revenues during the quarter from a revenue of P305.8 million last year as its power supply agreement with customers expired.

EDC’s costs of sale of electricity increased by 21.8 percent to P5.86 billion on higher purchased services and utilities which amounted to P934.4 million and costlier repairs and maintenance worth P108 million.

For this year, EDC has allotted over P17.38 billion for capital expenditures,  slightly higher than last year’s P16.98 billion.

A big chunk of this year’s capex, or P10.9 billion, is allocated for growth projects while P6.48 billion is allotted for power plant and steam field reliability improvement.

EDC increased its budget for growth projects by 31 percent from P8.3 billion it allotted last year.

On the other hand, the budget for the steam field related activities this year is lower by 25 percent compared with last year’s P8.68 billion allotment.

EDC is the largest pure renewable energy company in the Philippines, operating a total of 1,476.6 megawatts of clean and renewable energy from geothermal, wind, hydroelectric and solar.

It accounts for 19 percent of the country’s total installed renewable energy capacity.  It comprises 62 percent of the country’s total installed geothermal capacity, which put the Philippines on the map as the third largest geothermal producer in the world.