MANILA, Phils.--Aboitiz Power Corporation (PSE ticker symbol: AP) closed the first quarter of 2012 with a consolidated net income of P5.6 billion (bn), up by 10% year-on-year (YoY). This translates to an earnings per share of P0.76 for the period in review.

The revaluation of consolidated dollar loans and placements resulted to a P503-million (mn) non-recurring income. Accounting for all one-off items, AboitizPower’s core net income amounted to P5.1 bn, 9% higher YoY.

“Our revenue growth for the first quarter was propelled by a higher demand for energy, something we foresee continuing with higher levels of economic activity. AboitizPower is anticipating this increased demand for electricity by building the right mix of energy sources in its generating portfolio to be able to deliver better power solutions to customers at reasonable and competitive prices," said Erramon Aboitiz, President & CEO of AboitizPower.

Business Segments

Power Generation 

The power generation business recorded an income contribution of P5.1 bn, posting an increase of 3% YoY. When adjusted for non-recurring items, the group registered a 4% YoY rise in its core net income, from P4.4 bn to P4.6 bn. The enhanced bottomline was attributable to higher average selling prices and improved net generation level. 

The first quarter registered a 34% increase YoY in the average price of electricity in the Wholesale Electricity Spot Market due to both supply and demand conditions in the Luzon Grid. The average plant outages in Luzon were higher than last year, which curtailed available capacity. Meanwhile, demand picked up during the period with the Luzon grid’s recorded peak surging by 5% YoY, breaching the 7,200 MW mark. The hotter climate was one of the factors that led to the increase in power requirements. As an effect, AboitizPower recorded a 5% YoY improvement in its average selling price for its power.

AboitizPower’s attributable net generation for the quarter grew by 13% YoY, from 2,168 GWh to 2,452 GWh, mainly on the back of a 22% YoY expansion in power sales through bilateral contracts. On a capacity basis, the Company’s attributable sales increased by 14% YoY, from 1,302 MW to 1,483 MW. This was on the back of rising capacity sales through bilateral contracts and improved levels of ancillary services.

As of quarter end, AboitizPower’s attributable capacity was at 2,350 MW, posting a 15% YoY increase. The growth was due to the following: the assumption of full ownership of and control over the 70-MW Bakun hydro run-of-river plant and acquisition of the 242-MW Navotas power barges in May 2011, the full completion of the rehabilitation of the Ambuklao hydropower facility and the completion of the 4-MW Irisan hydropower greenfield project in September 2011, and the partial completion of the rehabilitation works at the Binga hydropower facility.

“To help provide solutions to the growing demand for energy in the country, AboitizPower will participate in the development of various greenfield projects, both hydro and clean coal, in the next 3 to 5 years.  In Mindanao alone, to ease the critical power shortage in the island, we have committed to invest P35 bn to add 354 MW of new capacity by 2015. We will also rehabilitate  existing plants to maximize capacity and improve reliability. We estimate the combined cost for new projects and rehabilitation to reach P170 bn," said Aboitiz.

Power Distribution 

In the power distribution business, expansions in volumes and margins resulted to a 61% YoY increase in income contribution, from P454 mn to P733 mn. AboitizPower’s attributable electricity sales for the quarter grew by 7% YoY, from 889 GWh to 950 GWh. Growth was spurred mainly by an 8% YoY increase in attributable power consumption of the industrial customer segment, while the residential and commercial sectors posted healthy YoY growth rates of 6% and 4%, respectively.

Gross margin for the group improved on a YoY basis  due to the implementation of the distribution utilities’ approved rates under the Performance Based Regulation (PBR) scheme. Subic Enerzone Corporation (SEZ) and San Fernando Electric Light & Power Co., Inc. (SFELAPCO) were the last distribution utilities of AboitizPower that shifted to PBR. Both SEZ and SFELAPCO entered their respective four-year regulatory period in October 2011, with implementation of approved tariffs taking place in January and March 2012, respectively.

"Information systems and a reliable and flexible network are at the heart of our efficiency, thus our distribution group is working double time to improve our systems and to upgrade our network infrastructure to better serve our growing residential, commercial and industrial customers,” Aboitiz said.

Financial Condition

As of March 31, 2012, the AboitizPower’s total consolidated assets amounted to P159.4 bn, 4% higher than year-end 2011 level of P153.5 bn. The Company’s consolidated Cash and Cash Equivalents was at P28.6 bn, while total consolidated interest-bearing debt was at P73.2 bn. Equity Attributable to Equity Holders of the Parent was at P74.1 bn, up 8% from year-end 2011 level. Current ratio as of quarter-end was at 4.1x (versus year-end 2011’s 3.5x), while net debt-to-equity ratio was at 0.6x (versus year-end 2011’s 0.7x). 

AboitizPower is the holding company for the Aboitiz Group’s investments in power generation, distribution, retail and power services. It is a major producer of Cleanergy, its brand for clean and renewable energy in the Philippines with several hydroelectric and geothermal assets in its generation portfolio and also has non-renewable power plants located across the country. The company owns distribution utilities that operate in high-growth areas in Luzon, Visayas and Mindanao. (For more details, please visit: www.aboitizpower.com and www.cleanergy.com.ph).