GEOTHERMAL giant Energy Development Corp. (EDC) posted a net loss of P487.7 million in the third quarter of year or 106.4-percent lower than its P7.583-billion net income in the same period last year.
In a filing to the Philippine Stock Exchange, EDC attributed the net loss to a number of factors, including lower revenues by P1.1 billion due to absence of steam sales and decline in power rates in the Wholesale Electricity Spot Market (WESM).
Other factors are the higher operating expenses at P5.778 billion due to the full impairment provision of Northern Negros Geothermal Project assets and spending for Bacon-Manito (BacMan) steamfields in preparation for the power plants’ recommissioning, as well as increases in general and administrative expenses, purchased services and utilities, and depreciation and amortization charges.
EDC noted that the recurring net income generated dropped by 38.4 percent to P3.967 billion from P6.44 billion posted in 2010. The revenue decline was net of the fresh contribution from FG Hydro’s P380.7-million revenues from ancillary services, and P1.061-billion higher revenues from Tongonan I and Palinpinon power plants mainly due to WESM sales and repricing of subsidiary Green Core Geothermal Inc.’s power supply agreements.
The decline in recurring net income was also due to the P1,184.7 million increase in operating expenses attributed to higher operations and maintenance expenses for the BacMan steamfields.
Cash and cash equivalents increased by 106.2 percent to P12.699 billion from P6.157 billion in the December 31, 2010 balance.
EDC added that the increase was mainly accounted for by the P13,350 million and P3,263 million proceeds from the $300-million bonds and a second loan from the International Finance Corp., respectively, and the P6.875 billion cash flow from operations.
EDC said the increases were mainly offset by the P6.695 billion investments in property, plant and equipment; P4.758 billion prepayment of yen-denominated loans from the Overseas Economic Cooperation Fund and P3.341-billion payment of cash dividend by the parent company and FG Hydro in 2011; and P1.035-billion increase in other noncurrent assets.
(Paul A. Isla)
