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Generation composes 81% of Aboitiz Power Corp’s earnings

Posted on October 29, 2014

MANILA, Oct. 29 (PNA) — Aboitiz Power Corporation’s power generation assets has brought in 81 percent of its earnings for the three quarters of 2014.

“The generation business accounted for 81 percent of earnings contributions from Aboitiz Power’s business segments, recording an income share of Php10.8 billion for the first nine months of 2014, down 11 percent year-on-year,” the company said in a statement Wednesday.

The company noted that the third quarter (Q3) has contributed Php3.2 billion of the Php10.8 billion figure, but is still down by 21 percent compared to the same period last year.

Aboitiz attributed the fall to the Magat Hydro-electric Plant’s low levels, Tiwi-Makban’s implementation of the Geothermal Resource Supply Contract and Pagbilao’s expired tax holiday.

But, Aboitiz’s net generation has increased by 2 percent from 8,245 Gigawatthours (GWh) to 8,395 GWh, year on year.

Moreover, Aboitiz’s distribution group has gone up by 2 percent from Php2.4 billion to Php2.5 billion, due to the increase in industrial consumption and the Lima Enerzone Corporation buy-out last June.

Electricity sales grown by 9 percent from 3,024 GWh to 3,299 GWh, versus last year.

However, its gross margin per kilowatthours (kWh) was reduced by 4 percent to 1.66 per kWh, versus last year.

“The unfavorable variance was brought about by the higher direct costs registered due to the lag in recovery of Visayan Electric Company, Inc.’s (VECO) cost of purchased power and the additional costs incurred by Davao Light & Power Company, Inc. (Davao Light) and Cotabato Light & Power Company (Cotabato Light) due to the running of their embedded plants to cover for the energy shortfall in the Mindanao grid,” Aboitiz Power said.

In total, Aboitiz Power Corporation’s Its core net income for 2014 has fallen by 15 percent at Php13.4 billion, versus last year.

On the other hand, Aboitiz said that Pagbilao’s 420 Megawatt (MW) expansion has commenced last Sept.It is also targeting the 300 MW Cebu Coal Project and the 68 MW Manolo Fortich Hydro Power Plant by year end.

Aboitiz Power’s shareholders has received earnings at Php1.79 per share.

Meanwhile, Aboitiz Power’s Chief Executive Officer (CEO) Erramon Aboitiz is pushing for the implementation of open access under the Section 31 of the Electric Power Industry Reform Act (EPIRA), which allows end-users who have a consumption 750 KWH to 1 MW to choose their supplier. They are called the contestable market.

“TO CREATE A MORE CONDUCIVE INVESTMENT CLIMATE IN THE POWER INDUSTRY, WE FAVOR THE FULL IMPLEMENTATION OF OPEN ACCESS THAT WILL INCLUDE CUSTOMERS WITH CONSUMPTION OF 750 KWH AND ABOVE. THIS WILL GIVE MORE CUSTOMERS THE POWER OF CHOICE,​ AND INCREASE COMPETITION.​ EQUALLY IMPORTANT, IT WILL ENCOURAGE INVESTMENT IN ADDITIONAL CAPACITY,” SAID ABOITIZ.

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