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MANILA, Philippines - First Gen Corp. expects profits to rise three-folds this year on the back of additional power generation from subsidiary Energy Development Corp. (EDC).
On the sidelines of the company’s annual stockholders meeting, Francis Giles B. Puno, First Gen president and chief operating officer, said the $35 million earnings in 2011 should grow significantly this year even without the non-recurring items it had to absorb in the previous year.
"Last year was a situation when we bit the bullet in Northern Negros, specifically the impairment of P5 billion which affected earnings. What we see as we improve the operational performance of the power plants of EDC specifically, then what we will show is improved recurring earnings being generated from EDC and across our portfolio like gas and hydro," Puno said.
EDC last year had to shut down its 49-megawatt Northern Negros generating facility because of technical constraints even as another plant, the 130-megawatt Bacon-Manito power complex, was undergoing rehabilitation.
EDC, however, has resumed operations on one of the BacMan plant's generating units and expects to have the entire facility up and running by September this year.
Richard B. Tantoco, First Gen executive vice president, said analysts project the company's earnings to hit around $110 million due to the additional capacity from BacMan coupled with the supply contracts EDC entered with distribution utilities and the power grid operator.
In the first quarter alone, First Gen already recorded a net income of $ 52.1 million, more than three times higher than the $16.1 million it pocketed last year.
“We are pleased with the improvement in the financial results this first quarter as it reflected solid performance across all platforms. We see the natural gas, hydro and geothermal portfolios delivering stronger recurring net earnings in the future," Puno said.
First Gen is the Lopez Group's power generation arm and its plants had a combined capacity of 2,800 megawatts, accounting for 18 percent of the country's total installed generating capacity.
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