First Gen income dips on energy headwinds

First Gen Corp. (FGen), the Lopez family’s renewable energy firm, reported a 12 percent drop in attributable recurring net income to P14.0 billion in 2024 from P15.4 billion in 2023, as weaker geothermal earnings and higher interest expenses offset gains in its natural gas business.

The company’s geothermal arm, Energy Development Corp. (EDC), saw lower revenue and increased cash operating expenses due to its ongoing drilling operations.

At the same time, FGen’s interest expenses rose after securing a P20 billion loan to acquire the 165-megawatt Casecnan Hydroelectric Power Plant. These headwinds outweighed the stronger performance of its natural gas segment and contributions from the newly acquired Casecnan facility.

Despite the earnings decline, FGen President and COO Francis Giles B. Puno said the company remains focused on maximizing the value of its clean energy portfolio.

“We are committed to finding solutions to help address the country’s critical issue of energy security,” he said.  

The company’s natural gas unit posted a 12 percent increase in recurring earnings to P10.7 billion from P9.2 billion in 2023, as its 1,000-megawatt (MW) Santa Rita and 500 MW San Lorenzo power plants benefited from cost efficiencies and lower interest expenses. Santa Rita also fully settled its long-term debt in May 2024.

FGen’s liquefied natural gas terminal generated higher recurring income from terminal fees charged to gas plants. However, earnings from the 420 MW San Gabriel plant declined after its power supply agreement with Meralco expired in February, followed by a planned outage in March. The 97 MW Avion plant also posted lower earnings due to turbine repair costs.

“Our gas-fired plants should benefit from the newly enacted Natural Gas Law, but we are reviewing our options for the 1,000 MW Santa Rita power purchase agreement, which expires in August.

Meanwhile, we are also focused on the benefits of completing our geothermal drilling campaign and commissioning our growth project,” Puno said.

EDC’s recurring attributable income, excluding hydro operations, fell 36 percent to P4.3 billion from P6.6 billion due to lower electricity sales and higher maintenance costs.

Outages in its Leyte and Negros plants, both planned and unplanned, further weighed on earnings, alongside additional interest expenses from new debt.

Meanwhile, FGen’s hydro segment contributed P1.1 billion in recurring income, with Casecnan generating P891.6 million since its February 2024 turnover.

The plant began supplying FGen’s customer base in June, supplementing its spot market sales. This helped offset the weaker earnings of the 132 MW Pantabangan-Masiway hydro complex, which fell to P174.4 million from P224.5 million due to lower water reservoir levels and weaker spot market prices.