First Gen Corp. posted a lower recurring net income of P3 billion in the first quarter from P3.8 billion a year ago, mainly due to the lower contribution of its gas and geothermal units.
The Lopez-led firm said in a statement that the natural gas platform incurred a 27-percent decrease in recurring earnings for the first three months of 2022 to P2 billion from P2.5 billion in 2021.
It said that the 97 megawatt (MW) Avion power plant's (Avion) Unit 1 was discovered to have incurred damage in December 2021, but was quickly brought back to operations by February after purchasing a new turbine. Moreover, the 420 MW San Gabriel power plant recognized lower capacity fees due to its de-ration from gas supply restrictions.
While all four natural gas fired plants benefited from greater electricity sales, higher fuel prices and operating expenses contributed to its lower earnings.
Including non-recurring items, the gas platform's attributable net income to parent fell to P2.2 billion for 2022 from P2.8 billion in 2021.
The gas platform incurred a higher income tax for this quarter as taxes in the first quarter included the effect of the Corporate Recovery and Tax Incentives for Enterprises Act's retroactive adjustments, though this was offset by insurance proceeds booked in 2022.
The geothermal, wind, and solar platform, under Energy Development Corp. (EDC), likewise suffered from outages, mostly attributable to Typhoon Odette that led to transmission constraints, as well as lower wind generation from Burgos for the first quarter this year in comparison to the same period last year.
Moreover, the income tax holiday of the Burgos project expired in November last year, which likewise led to lower earnings. EDC contributed both recurring and attributable earnings at P900 million, lower than its recurring and attributable income last year of P1.3 billion.
The hydro platform's contribution to recurring and non-recurring earnings both grew to P500 million for the first 90 days of 2022 from P200 million last year. The 132.8 MW Pantabangan-Masiway power plants generated a higher operating income from its contract with Meralco and merchant sales.
Consolidated revenues from the sale of electricity stood higher at P29.1 billion, up 18 percent from P23.2 billion in 2021. The higher revenues came from higher electricity sales that was supplemented by elevated fuel prices and Wholesale Electricity Spot Market (WESM) prices.
The natural gas portfolio accounted for 62 percent of First Gen's total consolidated revenues. EDC's geothermal, wind, and solar revenues accounted for 33 percent of First Gen's total consolidated revenues. The hydro plants accounted for 4 percent of First Gen's total consolidated revenues.
'First Gen generated more power in 1Q22 versus 1Q21. We reached another milestone this first quarter as EDC's 3.6 MW Mindanao 3 plant started operating last March. However, both Avion and EDC were affected by unplanned outages,' First Gen said.
It added that in EDC's case, it led to high replacement power costs as Typhoon Odette debilitated transmission capacity despite the plants' ability to produce power. EDC was able to wheel out its power by mid-January.
'As for the rest of the natural gas fleet, it was plagued by gas interruptions at the Malampaya field. This resulted in the importation of expensive liquid fuel. To address this recurring issue, the importation of LNG can happen by fourth quarter this year when the LNG terminal operates,' First Gen President and COO Francis Giles B. Puno stated.