Therma Visayas Inc., a subsidiary of Aboitiz Power Corp., is a coal-fired power facility located in Toledo City. | Aboitiz Power photo
CEBU CITY, Philippines—Despite challenges faced in 2019, Aboitiz Power Corporation still posted a net income earning of P17.3 billion.
This figure, though, is 20 percent lower compared to the P21.7 billion registered in 2018.
The company’s non-recurring income at P702 million boosted its net income, generated from net foreign exchange gains from the revaluation of dollar-denominated debts and derivatives, and former business unit Aseagas’ value-added tax recoveries and gains on land appraisal, according to a company statement.
Without these one-off gains, Aboitiz Power’s core net income for 2019 was ₱16.6 billion. However, this figure is 30 percent lower than the P23.8 billion recorded in 2018.
The decline in the company’s core net income was mostly due to the outages experienced during 2019, higher replacement power costs, lower spot market sales, increased interest expense, and increased depreciation expense.
Aboitiz Power’s generation and retail supply business recorded earnings before interest, taxes, depreciation, and amortization (EBITDA) of ₱36.2 billion in 2019, 16 percent lower than the ₱43 billion recorded for 2018.
This decrease in EBITDA was primarily due to the outages experienced by the company’s coal facilities during 2019 and exacerbated by the need to purchase replacement power at higher spot market prices.
The replacement power was also purchased from the spot market as the company had contracted ahead in anticipation of Therma Visayas Inc.’s incoming capacity. The decrease in spot market sales further eroded year-on-year (YoY) earnings.
The capacity sold for 2019 increased by 1 percent to 3,184 megawatts (MW) from 3,154 MW in 2018.
Meanwhile, Aboitiz Power’s distribution business recorded EBITDA of ₱8.2 billion, which was flat YoY.
The company experienced energy sales increase in 2019 to 5,851 gigawatt-hours (GWh), six percent higher than the 5,540 GWh sales recorded in 2018. The increase in earnings mitigated the lost margins generated from the decommissioning of Davao Light’s Bajada power plant.
Emmanuel V. Rubio, Aboitiz Power president and chief executive officer, however, expressed confidence the company would have a better performance this year.
“While market conditions had an effect on our 2019 financial result, we acknowledge that it was primarily driven by operational issues. Having done all the necessary measures to address these technical realities, we are positive about a much stronger operational performance and attaining our targets this year,” Rubio said.
“We are also confident that our incoming capacities from GNPower Dinginin and full-year operations of Therma Visayas and Hedcor Bukidnon will contribute to our 2020 bottom line,” Rubio added. /bmjo