First Gen’s natural gas, RE platforms boost earnings

LOPEZ-LED First Gen Corp. posted a first-quarter net income of USD 89 million, 50.8% higher than USD 59 million a year ago, as its natural gas and renewable energy subsidiaries delivered higher earnings.

“2023 is off to a promising start for First Gen as the portfolio benefits from the strong performance of almost all of its platforms,” Francis Giles B. Puno, president and chief operating officer of First Gen, said in a media release.

In the first quarter, First Gen’s revenues hit USD 652 million, up by 14.4% from USD 570 million in the same period last year. The company attributed the rise to elevated fuel and spot market prices.

First Gen said its natural gas portfolio accounted for the majority of its consolidated revenues or about 61%. Up to 35% came from Energy Development Corp.’s (EDC) geothermal, wind, and solar plants, while 4% came from the company’s hydropower plants.

For the January-to-March period, First Gen said its natural gas platform reported an 18.4% increase in recurring earnings to USD 45 million from USD 38 million year on year.

It said that all four of the company’s natural gas power plants delivered higher operating income due to high dispatch amid the lack of power supply in the grid.

First Gen also said its 420-megawatt (MW) San Gabriel power plant and 97-MW Avion power plant enjoyed better recurring earnings with their full availability in the first quarter.

“In 2022, San Gabriel suffered from a de-rated capacity due to gas restrictions and Avion had equipment issues. Strong dispatch and lower administrative expenses offset increases in interest expenses resulting from the high interest rate environment,” First Gen said.

The company said the geothermal power plants under its renewable energy arm, EDC, also recorded higher sales and operating income because of higher sales at the wholesale electricity spot market and higher electricity prices from new contracts.

“The operation of the LNG (liquefied natural gas) 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,” Mr. Puno said.

The company’s hydro platform registered recurring earnings of USD 7 million for the first quarter, 30% lower than the USD 10 million a year ago, as revenues slipped due to the reduced volume of electricity sold after the transfer of its power supply contract.

At the local bourse on Tuesday, shares in the company fell by 70 centavos or 3.83% to end at PHP 17.60 apiece. — By Ashley Erika O. Jose