First Gen’s earnings down 10% to $150m in H1

Blame it on its geothermal business.

First Gen Corporation said its recurring net income in the first half (H1) of 2024 fell 10% to $150m from last year’s $167m due to the weaker performance of its geothermal business.

In a bourse filing, the company also said that its H1 revenues decreased 0.7% to $1.28b. The decline was attributed to lower volumes of electricity sold during the period across all platforms except for the hydro platform, due to the additional sales volume from the 165-megawatt (MW) Casecnan Hydroelectric Power Plant following its turnover in February. 

First Gen’s natural gas portfolio accounted for 67% of the total consolidated revenues, whilst 30% came from Energy Development Corp.’s (EDC) geothermal, wind, and solar plants, and the balance came from the hydro business unit.

The natural gas business reported a 26% increase in recurring earnings to $115m. This was thanks to higher operating income in its power plants due to savings in operating expenses, and high spot market prices.

Gains in the natural gas unit partially offset the decline in the geothermal business, the company said. 

During the period, First Gen said the geothermal power plants under EDC generated lower sales and operating income due to a reduction in electricity prices and electricity sold, and higher operating expenses from steamfield maintenance and workover activities. The unit also incurred higher interest expenses from new debt.

“All of our natural gas plants were operating and providing vital power during the summer months when both yellow and red alerts were occurring. EDC likewise continues to produce 24/7 renewable energy and is currently working to reinforce its steam supply to ensure that it produces even more clean power with the completion of 83 MW of new geothermal plants by year end,” First Gen President and COO Francis Giles Puno said.

Meanwhile, the hydro platform contributed $5m to the company’s earnings in H1, with the takeover of Casecnan Plant resulting in $1m of recurring net income for its four months of operations in the first six months.

First Gen currently has 3,668 MW of installed capacity in its portfolio, which approximately accounts for 20% of the country’s gross generation. It has set a target to grow this to 13,000 MW by 2030.