Monday, 18 May 2009

Philippine energy corporaton Q1 net income rises 52.8% to P1.48B

Paul A. Isla
Business Mirror

SIGNIFICANT foreign-exchange gains have pushed geothermal giant Energy Development Corp.’s (EDC’s) net income by 53 percent to P2.27 billion in the first quarter of the year from P1.48 billion during the same period a year ago.

In a statement, EDC attributed the increase in net income to the recognition of P1.28-billion foreign- exchange gains from the translation to pesos of the yen- and dollar-denominated loans using the March 31, 2009 closing rates.

EDC said the total revenues also increased by P750 million, broken down as follows: P514.5 million from an increase in average electricity and steam prices; P168.9 million in construction revenues from the combined recognition of intangible assets for the buffer zone in Northern Negros and Tanawon project in Albay; and the P66.7-million increase in revenues from drilling services in Lihir Island, Papua New Guinea.

“EDC’s impressive financial performance is a result of our good fiscal management policies aimed at fostering prudent liability management,” said Fenina Rodriguez, EDC chief financial officer.

She added that EDC continuously looks for appropriate structure to hedge its yen exposure, specifically the Miyazawa 1 and 2 loans, since “currency risk on foreign debt is what affects EDC’s share performance the most.”

EDC has P30.64 billion in long-term foreign loans as of end-March, 78.8 percent of which is yen-denominated.

EDC added that it has already hedged the JY12- billion Miyazawa 1 loan and is now soliciting bank proposals for the hedging of the JY22-billion Miyazawa 2 loan.

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