EDC posts P1.45 billion net income for Q1

Energy Development Corporation (EDC), the country’s leading producer of geothermal energy, reported a net income of P1.45 billion for the first quarter of the year, down by 61.4 percent from the P3.77 billion posted for the same period last year.  Core net income also declined by 61 percent to P1.23 billion from P3.16 billion.

“The income result for the quarter is generally in line with our expectation for revenues to decline in the interim mainly due to forgone steam sales for our Bacman Project following the acquisition of the power plants in September 2010 and increased costs related to our acquisitions.  As explained before, we are a company in transition, in investment mode for the future,” EDC President and COO Richard Tantoco said.

Also contributing to the drop in income were the lower numbers of FG Hydro in the 1Q of 2010 due mainly to lower WESM price and output due to reservoir level.

The Company also incurred higher operating expenses for the period primarily due to increased operations and maintenance expenditures for the rehabilitation of the Bacman steamfield facilities as well as taxes paid for our newly acquired assets.  “It is necessary to accelerate this to re-commission the Bacman power plants within the year,” Tantoco added.

EDC, through its subsidiaries Green Core Geothermal, Inc. (GCGI) and Bacman Geothermal, Inc. (BGI), acquired the NPC-owned geothermal power plants which source steam from the Company’s steamfield assets.  With the acquisition, EDC’s steamfield and power plant operations became fully integrated making its operations more efficient and cost-competitive.

The Company has invested in the rehabilitation of the Tongonan, Palinpinon and Bacman power plants to bring them back to their rated capacities.  As it is, the Tongonan and Palinpinon power plants have already realized significant improvements in terms of availability and reliability.

At the close of 2010, GCGI successfully sealed long-term power supply contracts with electric cooperatives in Leyte and Negros islands.

EDC remains the largest producer of geothermal energy in the Philippines accounting for 62 percent of the total country installed geothermal capacity and is the largest integrated geothermal power company in the world.  Aside from geothermal, EDC also owns and operates the 132-MW Pantabangan-Masiway hydro electric plants and has investments in wind energy projects in Ilocos Norte and other provinces.