First Gen recurring earnings up 52% in Q1

MANILA, Philippines — Lopez-led First Gen Corp. saw its recurring earnings rise by more than half in the first quarter on the back of strong contributions from its natural gas subsidiaries and renewable energy unit Energy Development Corp. (EDC).

First Gen recorded a 52-percent surge in its recurring net income during the first quarter to $89 million from $59 million in the same period last year.

The company said its natural gas subsidiaries and EDC delivered higher earnings as a result of better operating income, though partially offset by higher interest expenses.

It likewise benefited from higher interest income due to higher yields from its internally generated cash.

Revenues of the firm during the three-month period jumped by 14 percent to $652 million from $570 million in the first quarter of 2022.

First Gen attributed the higher revenues from elevated fuel and Wholesale Electricity Spot Market (WESM) prices, coupled with an increase in volume of electricity sales.

First Gen’s natural gas portfolio accounted for 61 percent of the company’s consolidated revenues for the period, while 35 percent came from EDC’s geothermal, wind and solar plants.

The remaining four percent balance, meanwhile, came from the company’s hydro plants.

“The year is off to a promising start for First Gen as the portfolio benefits from the strong performance of almost all of its platforms,” First Gen president and COO Francis Giles Puno said.

First Gen’s natural gas platform reported a 17 percent year-on-year rise in recurring earnings for the first quarter at $45 million, with all four natural gas power plants delivering higher operating income on the back of high dispatch due to the lack of power supply in the grid.

EDC’s geothermal power plants, on the other hand, posted higher sales and operating income as they benefited from both an increase in WESM sales and higher electricity prices from their new contracts.

First Gen said EDC also had fewer purchases of replacement power due to its higher generation.

Meanwhile, contribution of the hydro platforms to First Gen’s recurring earnings declined by 28 percent   to $7 million during the quarter.

The company said the 132-megawatt Pantabangan-Masiway power plants generated lower revenues from a reduced volume of electricity sold due to the transfer of its power supply contract to EDC in August 2022.

First Gen is a subsidiary of First Philippine Holdings Corp., one of the oldest and largest conglomerates in the country which has interests in power generation, power distribution, infrastructure, manufacturing, and property development.

First Gen is a clean and renewable energy company, whose power plants run either on renewable energy sources, such as hydro, geothermal, solar, and wind; or on natural gas, considered the cleanest fossil fuel.

Puno said the company’s LNG Terminal is on its way to commercial operations, with commissioning set this quarter.

“The operation of the LNG Terminal should be beneficial not just for our portfolio, but for the grid in general as we will no longer be solely reliant on Malampaya gas for our operations,” Puno said.