Lower dispatch of gas plants pull down First Gen’s profit
The recurring income of First Gen Corp. slipped four percent from $87 million to $84 million due to lower dispatch of its natural gas plants.
“It was unfortunate that the natural gas plants suffered from lower dispatch in the first half of the year for a variety of reasons. We are hopeful that the dispatch of these plants will catch up especially with the higher cost of coal today,” First Gen president and COO Francis Giles Puno said.
“We are showing that lower carbon and clean gas- fired power from San Gabriel is running reliably and clearly cost-competitive compared to coal plants running 24-hour base load and cheaper on 12-hour mid-merit operations. We are still hoping to contract its output this year,” he said.
In terms of attributable net income, First Gen said it amounted to $58 million, lower than the recurring income due to the one-time effect of the break funding costs incurred as a result of the US$500 million refinancing of Santa Rita’s long-term debt last May 2017.
Another reason was the premium paid for subsidiary Energy Development Corp.’s partial buyback of its Dollar-denominated bonds.
First Gen, however, said all these initiatives are in line with the company’s program to deleverage and reduce its foreign currency debt exposure.
The company expects a better second half performance amid several company initiatives, such as its “debt reduction program, the EDC tender offer of Macquarie and GIC of Singapore, and the contracting of San Gabriel’s output,” Puno said, noting this is a positive period of transformation for the company.