This increase is attributed to higher revenue and lower net financial expenses, partly offset by combined increases in recurring costs of sale and general and administrative expenses. In 2019, net income represented 29.5% of total revenues, compared to 25.3% in 2018.

This favorable financial performance was also driven by the higher generated volume of our Palinpinon, BacMan, and Nasulo geothermal power plants, coupled with the full return to service of the Unified Leyte and Tongonan geothermal power plants after recovery from Typhoon Urduja.

In 2019, EDC generated total energy sales of 9,300.1 gigawatt hours (GWh), a 4.0% increase from 8,945.3 GWh in 2018. EDC ended the year with zero loan defaults and minimized negative carry for its investors. Overall, this means that EDC has the capacity to fund its growth, finance its needs, and provide healthy returns to its shareholders.

While there were challenges in terms of mismatch in contracting cycles with the entry to market of our Leyte and Mindanao capacities, EDC maintained a 93% contracting rate in 2019.

To continue to build the business, EDC strives to improve its contract portfolio and maintain a positive brand image and reputation. EDC also works closely with its suppliers to ensure their cooperation in the company’s efforts to improve its processes and technology, as well as to negotiate lower costs on material inputs.
EDC also supplies clean energy to 92 customer facilities, 57 of which are contestable customers. They, in turn, become part of a supply chain that not only helps power commercial and industrial business activities, but does so with clean and renewable energy. This working relationship has its inherent economic and environmental benefits as well.

We also recognize that our business is only made possible through the healthy and stable forest and watershed ecosystems that support our geothermal resources. In 2019, we invested around PhP43.26 million for our environmental programs geared towards reforestation, watershed management, waste management, and sanitation, among others.

Through our environmental programs, such as our BINHI Greening Legacy program, we not only help protect the natural resources, but also help generate significant environmental returns that have far-reaching benefits for the country, like carbon sequestration, biodiversity conservation and mitigation of climate change impacts. .

Similarly, we also invest heavily on strategic corporate social responsibility programs, with a particular focus on education, health, and livelihood. In 2019, our community investments amounted to around PhP104.3 million. These community investments do not just benefit EDC in terms of strengthening its social license to operate, they also help create economic and social opportunities for our host communities, our 52 primary partner barangays (PPBs), thereby empowering them towards community resilience and self-sufficiency.

We anchor our growth agenda on:

The development of existing geothermal capacity
The diversification of our renewable energy portfolio
The establishment of viable operations in Asia, Latin America, and Africa
The acquisition of key government geothermal privatization projects.

Economic Performance

We maintain healthy cash flows from long-term contract agreements and continuously improve our treasury, financial, accounting, and budgeting systems to tighten fiscal control and promote corporate governance and better risk management.
We ensure that our power generating assets are at optimum availability by climate-proofing our facilities. We are fully compliant with the regulations of the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE).

Market Presence

Economic prosperity in areas where we operate is a meaningful indicator of how well we contribute to local economic development. We continuously build the capabilities of community organizations and cooperatives for economic inclusion in the communities we work with.

Indirect Economic Impact

Our Community Partnerships program empowers stakeholders and partner communities to become agents of their own development. We help uplift the standard of living through focused initiatives on health, education, livelihood, and environment; royalty payments for host communities of power projects; direct investments in community projects; and ecosystem services for the preservation of the watershed areas in the project sites.

Our bi-annual social acceptability survey and CSR key performance indicators monitor the effectiveness of these initiatives and ensure lasting inclusive growth for our partner communities.

Procurement

The quality of suppliers plays a critical role in our success. Supply Chain Management allows us to undertake strategic sourcing for uninterrupted supply of goods and services, optimized inventory levels, vendor accreditation, spend analysis and market studies, and warehousing and logistics, among others.