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LOW
revenues from the Malampaya gas project have shrunk by a
third the net income of Philippine National Oil
Co.-Explorations Corp. (PNOC-EC) in the first half of
the year.
In a
disclosure to the Philippine Stock Exchange, PNOC-EC
said its net income dropped by 28 percent to about P1
billion in the first half of the year as compared to a
year ago based on its unaudited financial statement.
PNOC-EC
attributed the decline to the lower share in the cost
recovery from the Malampaya project that resulted in a
15-percent drop in revenues to about P3.29 billion.
Cost
recovery refers to the incentive granted by the
Department of Energy (DOE) to contractors of the
Malampaya, which allows them to deduct certain costs—to
a maximum of 70 percent of monthly sales revenue—before
sharing the remainder with the government.
Of the
amount, about P2.3 billion was generated from Malampaya;
P901 million came from the company’s coal projects; P66
million was earned from the Energy Supply Base, PNOC-EC’s
logistics hub; and P28 million was contributed by the
San Antonio gas project.
The
Malampaya gas project is a joint venture between Shell
Philippines Exploration BV, Chevron Malampaya Llc, and
PNOC-EC, which provides 2,700 megawatts of natural gas.
In 2006,
PNOC-EC posted a net income of P2.6 billion, mostly
driven by its 10-percent stake in the Malampaya natural
gas project.
PNOC-EC
said 95.6 percent of its net income came from the
proceeds of the Malampaya natural gas project, and its
total sales revenue for 2006 was P6.2 billion, which
went down by 7 percent from P6.7 billion in 2005 owing
to the diminished cost available for recovery in the
Malampaya project.
PNOC-EC
explained that the full recovery of its investments in
the Malampaya project substantially reduced its cost
recovery entitlement to P2.4 billion last year from P4.1
billion.
Since
the expenditures that can be subjected to cost recovery
from the government have already been significantly
reduced, PNOC-EC expects lower cash remittance from the
operator of the Malampaya project to its partners in the
succeeding years.
PNOC-EC’s
earnings resulted in an equity growth to P5.2 billion
last year from P2.6 billion in 2005 that almost doubled
the book value per share to P2.64 last year from P1.35
in 2005. From its unrestricted earnings, dividends of
P100 million was declared on December 12, 2006 and paid
on January 29, 2007 to shareholders of record on January
3, 2007.
PNOC-EC’s
revenue from the Malampaya project for 2006 is P4.8
billion, or 5 percent lower than the P5-billion revenue
in 2005. Meanwhile, revenue from its coal mining and
trading operations of P1.2 billion in 2006 is 21-percent
lower from 2005 revenue of P1.5 billion.
PNOC-EC
attributed the decrease in revenues from coal mining and
trading operations to the reduction in sales volume to
477.7 metric tons from 601.85 metric tons, partially
offset by the increase in average selling price to
P2,504 per metric ton from P2,139 per metric ton.
PNOC-EC
added that revenue from its energy supply base in
Batangas of P114 million increased by 29 percent from
P89 million in 2005 owing to the increase in fuel sales.
Its San Antonio Power Plant produced revenue of P79
million for its 2006 full-year operation, 392-percent
higher than its 4-month operation in 2005. |
