AboitizPower earns P12 billion net income in first nine months

Aboitiz Power Corporation (AboitizPower) recorded an 8% year-on-year (YoY) decrease on its consolidated net income, from P13.2 billion to P12.2 billion from January to September this year. This translated to earnings per share of P1.66. The revaluation of consolidated dollar-denominated loans and placements resulted to a non-recurring loss of P805 million (versus last year’s loss of P209 million).

Adjusting for this one-off, the Company’s core net income for the first nine months of 2015 amounted to P13 billion, down by 3% YoY.

Business Segments

Power Generation

AboitizPower’s generation arm recorded an income share of P9.5 billion or 78% of earnings contributions from the Company’s business segments for the period in review, down by 12% YoY.

The decline is attributed to the lower sales registered by Tiwi-MakBan plants due to the decline in steam flow; the full-year impact of the Wholesale Electricity Spot Market special payment agreement and the unrealized forex loss of Therma Luzon, Inc. due to the revaluation of its liabilities. The generation group’s income contribution should have been higher if not for the expiration of Magat plant’s income tax holiday.

Netting-out one-off items, its income contribution amounted to P10.4 billion for the period, which was 6% lower than last year.

As of end-September, AboitizPower’s attributable net generation rose by 9% YoY, from 8,395 GWh to 9,161 GWh, as electricity sold through bilateral contracts, which made up 90% of total energy sold during the period, expanded by 16% to 8,254 GWh. On the other hand, spot market sales decreased by 28% from 1,266 GWh to 907 GWh.

In terms of capacity, AboitizPower’s attributable sales increased by 5% YoY sales from 1,782 MW to 1,866 MW, thanks to higher sales through bilateral contracts and ancillary services. Meanwhile, improving water levels boosted ancillary sales by 38%.

As part of the Company’s ongoing capacity expansion program, Unit 1 of Davao Coal, with a net sellable capacity of 130 MW, began commercial operations last September 18 while Unit 2 is expected to be commissioned within the first half of 2016. Construction has also commenced for the Company’s 59-MW Negros Solar Energy Project.

“The country’s rapidly unfolding growth story fuels our commitment to provide the Philippines with reliable, ample, and reasonably priced power with the least impact on our environment and our host communities. The launch of the first unit of our Therma South baseload plant in Davao and our solar venture with SunEdison in Negros Occidental align with our efforts to boost our portfolio nationwide with a balanced mix of renewable and non-renewable energy sources,” said AboitizPower President and Chief Operating Officer Antonio R. Moraza.

AboitizPower recently disclosed that it entered into agreements to explore and develop a potential 2×55 MW geothermal plant with PT Medco Power Indonesia in East Java Province, Indonesia and a potential 127 MW hydropower generation project with SN Power AS and PT Energi Infranusantara along the Lariang River in Central Sulawesi, Indonesia.

“We will continue to pursue development and other suitable opportunities, both nationally and abroad. Our hydro and geothermal exploratory activities in Indonesia are strategic opportunities to leverage on our expertise and expand overseas via greenfield development and acquisition,” Moraza stressed.

SN Aboitiz Power-Magat, Inc. also signed a Memorandum of Agreement with the National Irrigation Administration (NIA) for the construction of an 8.5 MW hydroelectric power plant along the Maris Main (South) Canal in Magat.

Power Distribution

The power distribution group’s earnings share for the first nine months of 2015 increased by 6%, from P2.5 billion to P2.6 billion.

Spearheaded by a 9% growth in industrial sales, total attributable electricity sales increased by 7% YoY, from 3,299 GWh to 3,546 GWh. The group’s gross margin during the period, however, decreased by 3% YoY from P1.68 per kWh to P1.64 per kWh. The drop mostly came from Davao Light & Power Company, Inc., which incurred higher direct cost due to the lag in recovery of pass through charges and the additional cost for running its embedded plant during the period.