First Gen Corporation Reported US$150 Million in Net Income, a Decrease 10%

First Gen Corporation (First Gen), the Lopez Group‘s clean and renewable energy solutions provider, reported a 10% decrease in attributable recurring net income for the first semester of 2024 at US$150 million (P8.4 billion) in comparison to US$167 million (P9.2 billion) in 2023.

Energy Development Corporation’s (EDC) geothermal portfolio continued to produce lower recurring net income this year mainly from the decline of its revenues due to lower power prices and volumes sold, combined with an increase in operating expenses. However, higher profits from the natural gas business was able to partially offset the decline from First Gen’s geothermal business.

The Company generated US$1,278 million (Php 72.1 billion) in revenues in the first half of 2024, a 0.7% decrease of US$8.5 million (Php 0.5 billion) from US$1,287 million (Php 71.1 billion) in 2023. The lower revenues are a result of lower volumes of electricity sold during the first six months of the year across all platforms except for the hydro platform, due to the additional sales volume from the 165WM Casecnan Hydroelectric Power Plant (Casecnan) following its turnover in February 2024. The natural gas portfolio accounted for 67% of First Gen’s total consolidated revenues, while 30% came from EDC’s geothermal, wind, and solar plants. The balance comes from the Company’s hydro business unit.

The natural gas business unit reported a 26% increase in recurring earnings for the first half of 2024 to US$115 million (Php 6.5 billion) from US$91 million (Php 5.0 billion) in 1H23. The 420 MW San Gabriel Power Plant (San Gabriel), 1,000 MW Santa Rita Power Plant (Santa Rita) and 500MW San Lorenzo Power Plant (San Lorenzo) all delivered higher operating income due to savings in operating expenses, and high spot market prices in the case of San Gabriel. In addition, FGEN LNG Corporation generated commissioning revenues from its precommercial operations and terminal fees, though still uncollected to-date. Only the 97MW Avion Power Plant had lower net income due to lower kilowatt hour sales and higher operating expenses.

EDC’s recurring earnings (ex-Hydro) at US$44 million (Php 2.5 billion) for the first six months of 2024 was 42% lower than its recurring income of US$77 million (Php 4.2 billion) in 2023. The geothermal power plants under EDC generated lower sales and operating income due to a reduction in electricity prices and electricity sold, and higher operating expenses from steamfield maintenance and workover activities. The unit also incurred higher interest expenses from new debt.

The hydro platform’s contribution to First Gen’s recurring earnings was at US$5 million (Php 254 million) for 1H24. The takeover of Casecnan Plant in late February 2024 resulted in $1 million (Php 50 million) of recurring net income for its four months of operations in the first semester. This offset the lower recurring income of the 132 MW Pantabangan-Masiway power plants (PMHC) of US$4 million (Php 219 million) from $5 million (Php 286 million) last year. PMHC had a reduction in the volume of electricity sold due to its low water reservoir levels. It was also affected by lower Wholesale Electricity Spot Market prices. The decline was buffered by its higher contract prices. 

“Though First Gen started the year slow with the expiry of San Gabriel’s contract with Meralco, it is making some headway in recovery through WESM sales. The natural gas business unit also delivered higher net income via cost reduction. It cannot be denied that our new LNG terminal was able to offer gas supply to our power plants at a time when the grid needed it the most. All of our natural gas plants were operating and providing vital power during the summer months when both yellow and red alerts were occurring. EDC likewise continues to produce 24/7 renewable energy and is currently working to reinforce its steam supply to ensure that it produces even more clean power with the completion of 83 MW of new geothermal plants by year end,” First Gen President and COO Francis Giles B. Puno stated.

First Gen is a leading independent power producer in the Philippines that primarily utilizes clean and indigenous fuels such as natural gas, geothermal energy from steam, hydroelectric, wind, and solar power. The Company has 3,668MW of installed capacity in its portfolio, which approximately accounts for 20% of the country’s gross generation. First Gen has set a target to grow to 13,000MW by 2030. First Gen is a subsidiary of First Philippine Holdings Corporation, one of the most established conglomerates in the Philippines, and has over 20 years of experience in power development. It is part of the Lopez Group of Companies.