First Gen H1 income rises to ₧9B

By Lenie Lectura @llectura

Lopez-led First Gen Corp.

(First Gen) posted a recurring net income of p9 billion in the first semester, up by 30 percent from last year’s p7 billion, due to the strong performance of its subsidiary, energy development Corp. (edC).

“It was edC that mainly delivered higher earnings as a result of better operating income from higher electricity prices,” First Gen reported on Wednesday.

Revenues stood at p71 billion at end-June this year, up from p66 billion from last year’s level. The company attributed this from elevated natural gas and Wholesale electricity Spot Market (W eSM) prices.

The natural gas portfolio accounted for 63 percent of First Gen’s total consolidated revenues, while 34 percent came from edC ’s geothermal, wind, and solar plants. The company’s hydro plants accounted for the remaining 2 percent. edC ’s recurring and attributable earnings at p4 billion was 106 percent higher than its recurring income of p2 billion.

The natural gas platform reported a 5-percent decrease in recurring earnings to p5 billion.

The 1,000 MW Santa Rita and 500 MW San l orenzo power plants posted lower net incomes as their depreciation costs and interest expenses rose.

In contrast, the 420 MW San Gabriel power plant as well as the 97MW Avion power plant enjoyed better recurring earnings due to the full availability of both plants for the period and lower fuel costs.

The geothermal power plants under ed C recorded higher sales and operating income as they benefited from higher electricity prices.

Furthermore, ed C had fewer purchases of replacement power due to its higher generation. The 150 MW Burgos wind facility likewise benefited from a better wind regime in 2023.

The hydro platform’s contribution to First Gen’s recurring earnings declined by 41 percent year-on-year to p278 million due to lower energy sales.

The 132-MW pantabangan-Masiway power plants saw a reduction in the volume of electricity sold due to lower reservoir levels and the transfer of its power supply contract to edC last August 2022.

The decrease in electricity sold was partially offset by an increase in W e S M volumes sold, higher market prices, and lower purchases of replacement power. The decline was likewise buffered by savings in administrative expenses and higher interest income.

“We hope to carry over the good performance of the first half in the next six months. We are looking forward to a number of significant milestones that are expected to happen for the remainder of the year,” First Gen president Francis Giles puno said.

These include the commercial operations of its liquefied natural gas terminal at the First Gen Clean energy Complex and the closing and turnover of the 165MW Casecnan hydroelectric power plant the company purchased last May from the power Sector Assets and liabilities Management Corp.

B1

Co N V e R G e ICT Solutions Inc. emerged as the “best internet service provider” or IS p for Netflix users, according to the latest data from Netflix.

Citing the first-half data of Netflix’s IS p Speed Index report, Converge said it “delivered the best speeds among local telcos with an average of 3.4 Mbps from January to June this year.”

“It is our pride to have been consistently recognized for the quality of our service to customers. Rest assured that they can rely on us for their daily entertainment needs as we continue to give them only the best possible online experience,” Converge C e o and Co-founder d e nnis Anthony Uy said.

Measuring the prime-time Netflix performance of IS p s , the speed index assesses the networks based on picture quality, start times, and fewer interruptions to Netflix users. Lorenz S. Marasigan

CeNTURy pacific Food Inc.

(CNpF), the po -led food canning firm, said its income rose 8 percent to p3.19 billion in January to June, from the previous year’s p2.95 billion, mainly due to its strong performance in the second quarter.

Revenues for the period rose 7 percent to p33.44 billion from the previous year’s p31.28 billion.

For the second quarter alone, the company’s revenues rose 9 percent to p17.82 billion from the previous year’s p16.48 billion, as its branded business, such as Century Tuna and 555 sardines, was up by 15 percent.

Net income for the April to June quarter rose 10 percent to p1.7 billion from the previous year’s p1.54 billion.

“All things considered, we are grateful for the company’s performance in the first half of 2023. We attribute this to the all-weather nature of our portfolio, which has the flexibility to deliver in an evolving market landscape. Inflationary pressures are beginning to abate, which we take positively, but consumers are still feeling the crunch,” Richard Kristoffer S. Manapat, the company’s

CFo said. “We expect the branded segment to sustain its growth momentum, supported by resilient domestic demand. however, uncertainties remain, especially in oeM [original equipment manufacturing] exports. our gross margin outlook in the coming months is favorable, and we aim to reinvest these gains in demand generating activities, brand building, and innovation.”

The branded business—composed of marine, meat, milk and other emerging segments—catered predominantly to the domestic market.

Meanwhile, CN p F ’s o e M tuna

Che M ICA l manufacturer d&l Industries Inc. said its income declined by 28 percent to p1.24 billion in the first half from the previous year’s p1.71 billion on higher inflation and the costs it incurred for its new plant in Batangas. despite the company’s financial performance during the period, d&l president and Ceo Alvin l ao said optimistic about its long-term prospects.

“It’s really to emphasize that this [Batangas plant opening] is a game changer for us. This is really a big reason to be very optimistic about the company,” l ao told reporters in a press briefing.

“When it’s finally up and running, it will more than offset a lot of these costs. And as as we get to being fully operational, that’s when we will start to see the benefits coming in.” he said the company will continuously ramp up the operation of the plant for the next 3 years. e x cluding the Batangas plant capital expenditures, the company the drop in its net income in January to June would have reached only 13 percent to p1.48 billion from the previous year’s p1.71 billion. l ao said the company’s perfor- mance during the first half was also a result of base effects.

Sales during the period fell 27 percent to p16.23 billion from the previous year’s p22.32 billion.

The company said revenues from its high-margin specialty products returned to prepandemic levels at 63 percent from 51 percent last year. The rest were from commodity products, from yield smaller earnings. o ver time, as commodity sales continue to normalize and as the company continues to allocate much of its resources in growing the highmargin business, the company said it expects to see a continued increase in revenue contribution from highmargin products.

“In terms of outlook for the year, it’s hard to say; I can’t give any specific numbers. But definitely there are more challenges this year compared to what we were expecting when we were when we were doing our planning last year,” l ao said.

The consumer products segment saw its income grow by 41 percent year-on-year for the second quarter, while food ingredients business saw its margins recover, increasing by almost 7 percent during the first half. e a rnings of Chemrez, its biodiesel arm, declined by 47 percent due to the high-base effects and also due to inflation, weaker consumer spending and the highly competitive landscape in the biodiesel business.VG Cabuag and coconut exports business saw a 7-percent year-on-year decline in sales in the first half on the back of high base effect and soft markets.

In terms of profitability, the company began to see an uptick in its gross margin only in the second quarter at 24.4 percent, improving by 80 basis points versus the first quarter as commodities trended downward and the higher cost inventory carried over from the year before was depleted.

CNpF said its first-half gross margin contracted by 110 basis points to 24 percent. VG Cabuag

The National Grid Corporation of the p h ilippines (NGCp) has assured the energy Regulatory Commission (eRC) of its full compliance with the rules and guidelines concerning the transmission sector.

The grid operator said it has discussed with the regulators the streamlining of its regulatory compliance with the commission. Those involved in the discussion were NGCp Vice Chairman henry Sy Jr., NGCp president Anthony Almeda, director paul Sagayo Jr. and Vice p resident and head for Revenue and Regulatory Affairs Maria Cynthia Manrique. The NGCp officials met with eRC Chairperson Monalisa dimalanta.

“our meeting with chairperson dimalanta will hopefully pave the way for the efficiency of our regulatory compliance processes and timelines. We were assured that all processes involving NGCp will be characterized by the enabling environment and rule of law mentioned by president Marcos in his State of the Nation Address,” said Sy.

NGCp holds the sole and exclusive concession and franchise for operating the philippines’s transmission network.

The eRC, for its part, said it regularly engages in discussions with regulated entities to identify valuable opportunities for enhancement within the regulatory framework. open dialogues play a crucial role in fostering a collaborative strategy to address challenges on achieving a reliable and sustainable energy future exploring avenues to streamline regulatory compliance,” it said. one of the highlights during the presentation was NGCp ’s roadmap to achieve the country’s generation targets, which is notably driven by renewable energy sources. These generation targets align with the target of the philippine energy plan (pep) which seeks to increase renewable energy generation to 35 percent by 2030 and 50 percent by 2040. Implementing the pep will require updating transmission lines to efficiently transmit additional supply to distribution utilities.

The meeting was held after NGCp presented its proposed Transmission de velopment pl an (T dp) for the years 2023-2040 to the eRC.

The Tdp is a strategic plan to address the country’s transmission infrastructure needs, and outlines the necessary expansion and upgrade of the transmission system, to ensure the reliable and efficient delivery of electricity across the country.

The NGC p also informed the eRC of the developments in the luz on, Visayas and Mindanao grids, such as the status of the MarivelesBalsik San Jose 500kV transmission time project, the Cebu-Negrospa nay 230kV backbone project, and efforts in deploying new power plants in the z a mboanga area and Caraga region. Lenie Lectura