Aboitiz Power sets capex of P17.4 billion for 2010

CEBU, Philippines - Following the brisk revenue performance in 2009, Aboitiz Power Corporation (AP) sets capital expenditure (capex) of P17.4 billion in 2010 for the expansion of its power plants nationwide.

During the Stockholders Meeting held yesterday at Cebu City Marriott Hotel, AP president and chief executive officer (CEO) Erramon I. Aboitiz said bulk of the expenditure this year will go to the Tiwi-Makban plant rehabilitation.

By 2011, AP will start to invest on ‘green fields” plant especially in Mindanao area, to address the looming power shortage in Mindanao.

AP’s total consolidated revenues in 2009 grew by 89 percent, hitting P23-billion mark.

The growth, Aboitiz said was mainly due to the fresh top-line contributions of the acquired generation assets that were turned over to the company in 2009.

AP closed 2009 with a record net income of P5.7 billion, 31 percent higher than in 2008. Both the generation and distribution businesses shored in strong results during the year, Aboitiz said.

Significantly, AP sees more opportunities for further growth this year, under the open access regime as it also plans to acquire more government-owned assets to boost its power generation portfolio.

“Our country will demand more power in its hunger for growth and progress. We are therefore ramping up our capabilities to develop Greenfield projects to help boost the country’s power requirements. We remain committed to provide available, affordable and acceptable energy to our customers,” he said.

The generation business accounted for 75 percent of AP’s total earnings, contributing P4.7 billion in 2009, up by 68 percent. This was on the back of a 167 percent year-on-year (YOY) rise in total attributable power sales, increasing from 1,728 gigawatt hours (GWh) to 4,619 GWh.

The expansion mainly came from the 202 percent increase in AP’s attributable generation capacity from 578 megawatts (MW) at the end of 2008 to 1,745 MW at the end of 2009. The increased capacity came from the Tiwi-Makban and Pagbilao facilities.

“We remain optimistic that the company will realize substantial growth from its existing distribution utilities. We expect to achieve this through healthy organic growth and widening margins when we attain rate increases as we enter the new Performance Based Regulation (PBR) regime,” Aboitiz said.

As of December 2009, AP’s total assets increased by 136 percent, reaching P111 billion.

“Deregulation and open access will redefine the rules of the game, simultaneously introducing more opportunities and threats. We have , therefore, been reshaping your company to ensure that we capitalize on these developments by positioning our business and organization for a more challenging future,” Aboitiz told the company’s stakeholders.