Saturday, 27 March 2010

EDC’s net profit soars 150% to P3.37 billion

By MYRNA M. VELASCO
Manila Bulletin
http://www.mb.com.ph/articles/249706/edc-s-net-profit-soars-150-p337-billion

The core net income of publicly-listed Energy Development Corporation (EDC) of the Lopez group ended on a rosy note last year to P7.38 billion, climbing 26.5-percent from the 2008 level of P5.83 billion.

For the company’s net income, the percentage jump was even heftier at 150.4 percent to P3.37 billion from the previous year’s P1.34 billion.

“The significant improvement in the core net income is largely attributable to the hike in total revenues, more favorable exchange rates and the impact of the Renewable Energy (RE) Law on accounting treatment,” the company has explained in a statement.

EDC added that the resulting net income is higher to P2.02 billion, if the P2.73 billion jump in revenues from electricity sales and drilling services be factored in.

The company likewise reported a turnaround in foreign exchange management, having logged P1.3 billion forex gains last year from a very immense level of P9.4 billion forex losses in 2008.

EDC president and chief operating officer Richard B. Tantoco pointed out that “although the one- time write down in deferred tax assets affected our income, it was a necessary step before we can realize the fiscal benefits afforded by the RE law.”

He further explained that with the RE law’s incentives, the company would be able to give hard push in developing “new geothermal areas in the country and expand what we have in a sustainable manner.”

The company executive added that the positive gains somehow “offset the write-down of P2.9 billion deferred tax assets arising under the RE Law, the P2.22 billion increase in operating expenses mainly due to steam augmentation activities, and the impact of the P3.1 billion one-time arbitration award in 2008 which reduced expenses and increased other income in said year.”

Onward, the company is also positively weighing prospects “with the re-denomination of debt stock and upcoming retirement of (EDC’s) Miyazawa II and other on-lent loans.”

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