First Gen Corporation (First Gen) reported net income attributable to equity holders of the Parent of US$52.1 million for the first quarter of 2012, a marked increase of 171.4% compared with the US$19.2 million net income registered during the same period last year. The sharp increase was mostly due to the higher income contribution of its affiliates, Energy Development Corporation (EDC) and First Gen Hydro Power Corporation (FG Hydro) in the first quarter of 2012.
EDC generated US$23.4 million in income to First Gen in the first quarter, compared with US$12.7 million in the same period last year. The power sales contracts of EDC’s Green Core Geothermal, Inc., the owner of the Palinpinon and Tongonan plants in Leyte, that became effective in mid-2011 was the driver of the better financial results. As of March 31, 2012, First Gen’s increased economic stake in EDC of 48.8% is now reflected in its equitized net earnings. First Gen owned a 44.2% economic stake in EDC as of the same date last year.
Moreover, FG Hydro (operator of the 132 MW Pantabangan-Masiway hydroelectric plants) had sterling results for the first quarter. FG Hydro effectively contributed earnings of US$17.8 million to First Gen mainly through its sales of electricity via ancillary services. EDC co-owns FG Hydro with First Gen via a 60:40 ownership structure.
First Gen's consolidated revenues rose by US$73.3 million, or 23.1%, to US$390.6 million in the first quarter of 2012 from US$317.3 million for the same period last year. Apart from the improvement of the share in net earnings of its affiliates, the increased revenues reflected the higher fuel prices of the 1000 MW Santa Rita and the 500 MW San Lorenzo natural gas power plants. Fuel prices during the first quarter had an average price of $13.3/MMBtu compared with $10.5/MMBtu in the same period last year. The natural gas plants contributed US$20.1 million to the Company’s attributable net income.
The Company’s consolidated interest expense dropped by US$3.4 million from US$22.5 million in 2011 to US$19.1 million in 2012 with the prepayment of the P5.1 billion outstanding debt of its subsidiary, Unified Holdings Corporation, and the buy back of some of its convertible bonds.
"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. We continue to be focused on operational improvements, with particular concentration on the EDC geothermal plants -- especially the completion of the rehabilitation of the BacMan plants this year,” First Gen President Giles B. Puno said.
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