Friday, 7 May 2010

EDC net income soars 68% to P3.8 billion

By MYRNA M. VELASCO
Manila Bulletin
http://mb.com.ph/articles/256270/edc-net-income-soars-68-p38-billion

Financial prospects for publicly-listed Energy Development Corporation (EDC) is on the upswing having logged 68 percent income jump in the first quarter to P3.80 billion from last year’s P2.27 billion in the same period.

The Lopez-controlled firm’s core net income is similarly in upbeat form with 103 percent rise to P3.2 billion from the year-ago level of P1.6 billion. It added that earnings before income tax, depreciation and amortization (EBITDA) has also been perked up, posting 82 percent climb to P4.94 billion; with P1.22 billion contributed by two subsidiaries.

The company qualified that the major profitability driver for the period were income from subsidiaries – mainly Green Core Geothermal Inc. which is the operating vehicle for its acquired 192.5-megawatt Palinpinon and 112.5-MW Tongonan I geothermal plants; and the First Gen Hydro Power Corporation for the 112-MW Pantabangan-Masiway hydro plants.

EDC president and chief operating officer Richard B. Tantoco enthused that the company is “off to a good start in 2010;” chiefly citing the balance sheet outcome from the two subsidiaries for the acquired assets.

The Lopez firm’s renewable energy arm, which has also been carving its niche in offering clean energy to off-takers and patrons, sees value in going for the green energy option. Tantoco further intimated “we are sensitive to their preference for clean, reliable, sustainable and affordable energy sources. The pricing of the indigenous renewable energy resource that we offer our customers is independent of any indexation to movements in global energy indices. This was validated by the long-term contracts that we have already secured for the Palinpinon and Tongonan geothermal power plants.”

The “green energy race” is evidently brewing in the deregulated power industry; and market competition is even seen moving ahead in that pathway.

Having proven beneficial investment return from asset acquisitions, Tantoco bared that their next step would be to pursue the rehabilitation of the 150-megawatt Bacon-Manito (BacMan) geothermal facilities once turned over to them. Another company subsidiary, BacMan Geothermal Inc., submitted the highest offer in an auction concluded May 5.

“We are programming the rehabilitation of the Bacman power plants and bring them back to their full capacity within 18 to 24 months,” the EDC executive stressed. The geothermal facilities have not been in operation for the past three years; and the challenge for the new owner would be to bring them back into their rated operating level. EDC is also the steam supplier for the two plants.

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