ABOITIZ Power Corp. (AboitizPower) recorded a total net income of P1.9 billion for the quarter ending Dec. 31, 2009, a 60 percent expansion against the same period last year.
The stronger peso resulted in a P483-million non-recurring gain due to the re-valuation of dollar-denominated loans and placements on a consolidated basis.
This, coupled with a P103-million reversal of National Power Corp. (Napocor) charges for ancillary services and one-off transaction costs of P47 million for the Pagbilao Independent Power Producer Administrator (Ippa) contract, resulted in total non-recurring income of P539 million for the quarter.
This brings AboitizPower’s core net income for the fourth quarter of 2009 to P1.3 billion, nine percent higher year-on-year (YOY).
In August 2009, AboitizPower’s wholly owned subsidiary, Therma Luzon, Inc. (TLI) won the bid for the appointment as the IPP Administrator (Ippa) of the 700 megawatt (MW) contracted capacity of the Pagbilao coal-fired power plant in Pagbilao, Quezon.
The bidding was conducted by the Power Sector Assets and Liabilities Management (Psalm).
As an Ippa, TLI is responsible for the coal procurement and the dispatch/sale of the plant’s generated power.
Operation and maintenance of the plant remain the responsibility of the IPP, in this case TEAM Energy.
Ownership of the plant will revert to TLI upon the expiry of the build-operate-transfer (BOT) period in 2025.
As part of the Ippa agreement, TLI will pay Psalm a series of monthly payments from the time it assumes dispatch control, from October 2009 to August 2025.
Given the nature of this transaction, TLI accounted for the Pagbilao Ippa in its financial records as a finance lease, where the company will incur non-cash expenses as a result of booking an asset and a liability.
Netting out the non-cash expenses incurred by TLI, AboitizPower’s core net income in the fourth quarter 2009 would have increased further to P2.8 billion, recording a 133 percent YOY bottomline improvement.
On a year-to-date (YTD) basis, AboitizPower’s net income recorded a 31 percent YOY increase, from P4.3 billion to P5.7 billion, translating to earnings per share of P0.77.
With a non-recurring gain of P368 million (against last year’s non-recurring net loss of P331 million), core net income grew by 13 percent YOY, from P4.7 billion to P5.3 billion.
The non-recurring gain for the period in review resulted from the one-off expenses related to the acquisition of the Tiwi-Makban geothermal plants and the Pagbilao Ippa contract, which were offset by the reversal of NPC charges for ancillary services and foreign exchange gains that resulted from the revaluation of dollar-denominated loans and placements.
When the impact of TLI’s finance lease is taken out, AboitizPower’s core net income for the year would have reached P6.8 billion, up 46 percent YOY.
AboitizPower president & CEO Erramon Aboitiz said, “We are very pleased with the results of AboitizPower. It is a result of the hard work of the entire team at AboitizPower and of years of patiently investing and building a portfolio of assets that are competitive and also complementary to each other.” (PR)