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First Gen Corporation reports $35 million net income in 2011...

First Gen Corporation (First Gen) reported an attributable net income to Parent of $35 million for the year ended 2011, a decline of 50.1% compared with last year's $70.2 million. The decline was mostly attributable to the lower income contribution from its affiliate, Energy Development Corporation (EDC), as it incurred a loss of $9.3 million in 2011 compared with an income contribution of $52.5 million in 2010. The lower earnings from EDC had mainly resulted from the non-cash impairment of $115.3 million (or PhP5.0 billion) on the Northern Negros Geothermal Project (NNGP) and foregone steam revenues of PhP1.8 billion following EDC's acquisition of the Bacon-Manito Geothermal Power Plants in September 2010. The non-cash impairment charge was earlier reported in June 2011.
"The poor financial performance of EDC was disappointing but expected given to the current operating activity focused on the rehabilitation of the Bacon-Manito, Palinpinon and Tongonan power plants combined with the full impairment of the Northern Negros plant in EDC's books. Despite the decreased earnings contribution of EDC in 2011, we continue to be a full believer in the future value of the company and have, in fact, continued to increase our ownership in the company. We are also pleased with the stable performance of our hydro and natural gas plants as they continue to deliver good returns to First Gen. The lower financing costs of the group have also put First Gen on more solid financial footing," First Gen President Giles Puno said.

First Gen's consolidated revenues rose by $119.3 million, or 9.6% to $1.4 billion in 2011 from $1.2 billion in 2010. The increase revenues reflected the higher dispatch and fuel prices of the 1,000MW Santa Rita and the 500MW San Lorenzo natural gas power plants. The gas plants operated at its highest dispatch to date of 89.2% compared with 82.7% in the previous year. The gas plants delivered stable attributable earnings to the Parent of $70.9 million in 2011.

First Gen Hydro Power Corporation's (FG Hydro) 132 MW Pantabangan-Masiway hydroelectric power plant was able to partially offset the loss by contributing higher earnings from its ancilliary services that it provides to the National Grid Corporation of the Philippines since last August. FG Hydro contributed earnings of $24.8 million to First Gen, which was 151.6% higher as compared with $9.9 million in 2010.

The PhP10 billion perpetual preferred shares issued by First Gen in July 2011 enabled the company to prepay the PhP5.1 billion outstanding debt of its subsidiary, Unified Holdings Corporation, and by back some of its convertible bonds. As a result, the company's consolidated interest expense dropped by $19.2 million from $104.2 million in 2010 to $84.9 million in 2011, which partially offset the effect of EDC's reported impairment.

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"First Gen Corporation reports $35 million net income in 2011" was written by Mary under the Business category. It has been read 1695 times and generated 0 comments. The article was created on and updated on 20 March 2012.
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