First Gen posts first-half net income at $20.3M

Written by Paul Anthony A. Isla / Reporter

[BUSINESSMIRROR]FIRST Gen Corp., one of the country’s largest power generator, said net income in the first semester slightly dropped to $20.3 million from $20.7 million during the same period a year ago.

“The company’s higher interest expenses incurred mainly from the refinancing of its 1,000-megawatt Santa Rita natural gas-fired power plant, lower net income from geothermal steam and power provider Energy Development Corp. (EDC), derivative losses from convertible, were offset by lower administrative expenses, favorable foreign exchange movements, and deferred income tax benefits from the depreciation of the peso against the US dollar,” First Gen said in a disclosure to the Philippine Stock Exchange.

First Gen added that net income of $74.4 million, however, was 17.7-percent lower than the previous year’s $90.4 million owing to lower income from EDC given the effect of incremental costs on the company’s steam augmentation projects that were implemented in its Leyte facility.

In May 2009 Prime Terracota Holdings Corp. issued Class B preferred shares to Lopez Inc. Retirement Fund and Quialex Realty Corp.

With the preferred share issuance, First Gen’s voting interest in Prime Terracota was reduced to 45 percent, resulting in the deconsolidation of Prime Terracota and its subsidiaries, which include Red Vulcan Holdings Corp.

Red Vulcan is the entity that holds a 60-percent voting and a 40-percent economic stake in EDC. The deconsolidation now allows First Gen’s 40-percent interest in EDC to be accurately reflected in its financial statements.

As a result of the deconsolidation of EDC’s numbers from First Gen’s financials, the consolidated financial statements present a more precise picture of First Gen’s financial position.(Read More)