First Gen Q1 net income up 42% to $89-M
First Gen [FGEN 17.50 0.6%; 231% avgVol] [link] reported a Q1 net income of USD $89 million, up 42% y/y. Revenues from the sale of electricity were up 14% y/y, and operating income was up 44% y/y. FGEN said that the better result was mostly attributable to the higher spot electricity prices that it was able to net for its electricity, but also said that running its San Gabriel plant at full capacity for the quarter helped (as opposed to running it at “de-rated” capacity during the shortage of fuel supply from Malampaya in Q1 last year).
MB BOTTOM-LINE
The financial benefits of weaning its LNG plants off of fuel from Malampaya were made obvious (once again) by this earnings report. Time flies! The LNG terminal that FGEN has been building is likely to be commissioned this quarter, meaning that commercial operations are just around the corner.
LNG self-sufficiency follows, subject (as always) to market prices. But that’s not what has people talking about FGEN.
What’s got people talking is the rumors that FGEN might be the next company to be the target of a tender offer to take it private.
Rumors of that happening have been quietly circulating since KKR, the massive American private equity firm, purchased 262 million shares of FGEN in a (wildly successful) tender offer two years ago to gain a 19.9% stake in the company.
Volume in FGEN’s stock jumped up over 1,000% starting on April 25, going from a sleepy 8,000 shares per day to nearly 90,000.
That kind of volume has sustained through to today, leading some to wonder if there are some people who maybe know something that we don’t. FGEN’s free float is just 11.67%, so it wouldn’t take much to mop up the public shareholders.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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