EDC income drops 86% to P615M (zambotimes)
In a statement, EDC said the non-cash impairment of P5.1 billion taken during the year on the Northern Negros Geothermal Project (NNGP) was the major contributor to the substantial decline in the company’s net income.
The decline was also blamed on the P1.21 billion of foregone steam revenues resulting from EDC’s acquisition of the Bacman Power Plants to which the company supplies the steam.
EDC said this has also impacted on the company’s recurring net income which declined by 27.5 percent to P5.2 billion from P7.2 billion the year before.
“2011 was a difficult year because we had to absorb sizable hits, primarily the P5.1 billion write off of Northern Negros and the P1.21 billion of foregone steam sales of Bacman. We are working hard to attain our targeted third quarter 2012 re-commissioning of the 130 MW Bacman Plants," EDC president and chief operating officer Richard Tantoco said.
He said the full impairment of NNGP will be cash accretive, as the project incurs an annual cash operating cost of P800 million from its sub optimal operations.
“The impairment decision taken on NNGP, albeit costly, was necessary to clear the issue with finality," Tantoco added.
The decline in net income was partially offset by the P1.1-billion revenues from FG Hydro’s sale of ancillary services. FG Hydro, a subsidiary of EDC, is the operator of the Pantabangan-Masiway hydroelectric power plants.
EDC last month has awarded the repair of both Unit 1 and Unit 2 Generator Rotors to Alstom SA of France, which forms part of the repair of the Baconman geothermal plants.
EDC targets to complete the rehabilitation of the Bacman geothermal plants within the latter part of the third quarter this year.
The BacMan geothermal plant is located in the boundary of Legaspi City, Sorsogon City, Bacon District of Sorsogon City and the town of Manito Albay in the Bicol Region.
The geothermal complex originally had a 150-megawatt power generating capacity but has not been operating since last year.
EDC, controlled by First Gen Corp., accounts for 62 percent of the total country installed geothermalcapacity. (PNA)
EDC said this has also impacted on the company’s recurring net income which declined by 27.5 percent to P5.2 billion from P7.2 billion the year before.
“2011 was a difficult year because we had to absorb sizable hits, primarily the P5.1 billion write off of Northern Negros and the P1.21 billion of foregone steam sales of Bacman. We are working hard to attain our targeted third quarter 2012 re-commissioning of the 130 MW Bacman Plants," EDC president and chief operating officer Richard Tantoco said.
He said the full impairment of NNGP will be cash accretive, as the project incurs an annual cash operating cost of P800 million from its sub optimal operations.
“The impairment decision taken on NNGP, albeit costly, was necessary to clear the issue with finality," Tantoco added.
The decline in net income was partially offset by the P1.1-billion revenues from FG Hydro’s sale of ancillary services. FG Hydro, a subsidiary of EDC, is the operator of the Pantabangan-Masiway hydroelectric power plants.
EDC last month has awarded the repair of both Unit 1 and Unit 2 Generator Rotors to Alstom SA of France, which forms part of the repair of the Baconman geothermal plants.
EDC targets to complete the rehabilitation of the Bacman geothermal plants within the latter part of the third quarter this year.
The BacMan geothermal plant is located in the boundary of Legaspi City, Sorsogon City, Bacon District of Sorsogon City and the town of Manito Albay in the Bicol Region.
The geothermal complex originally had a 150-megawatt power generating capacity but has not been operating since last year.
EDC, controlled by First Gen Corp., accounts for 62 percent of the total country installed geothermalcapacity. (PNA)
