EDC net income drops by 6.5% in 1st 9 months due to Leyte earthquake

MANILA, Philippines – Lopez-led renewable energy producer Energy Development Corporation (EDC) saw its bottom line fall by 6.5% for the 1st 3 quarters of this year compared to last year due to the effects of the earthquake that struck Leyte on July 6.

In a disclosure to the Philippine Stock Exchange (PSE) on Wednesday, November 15, EDC reported a recurring net income attributable to equity holders of P6.6 billion for the January to September period, compared to P7 billion in the same period last year.

With non-recurring items included, EDC's net income attributable to equity holders hit P6 billion – also down compared to the P7.4 billion last year. This was driven by lower revenues, lower proceeds from insurance claims, and a premium paid for the early redemption of the company's US dollar-denominated bonds.

But this, EDC noted, was partly offset by lower foreign exchange losses and cheaper financing costs for the period.

Earthquake's effects

EDC attributed the drop to the effect that July's magnitude 6.5 earthquake had on the firm's Leyte unit, its largest. At the time the earthquake hit, EDC said its Leyte unit was producing 540 megawatts (MW) of electricity but it had to be stopped.

The firm has since brought back to service all of its major units, save for two 60-MW units in its Mahanagdong geothermal plant. EDC's 3 power plants in Leyte produce around 650 MW of power.

"We expected the effect of that major earthquake in July on our Q3 results. However, we've successfully brought back to service our damaged units earlier than we originally forecasted, and at the same time strengthening our facilities," said EDC chief financial officer Nestor Valdez in a statement.

The renewable energy producer also noted that it ran its Bacman geothermal unit at full capacity to generate an additional P500 million in revenue to help offset the Leyte loss.

EDC's consolidated revenue for the 1st 9 months of the year hit P24.6 billion, down 3.1% from the P25.4 billion in the same period last year.

The firm reported a cash balance of P13.6 billion with consolidated debt to equity of 1.10x to 1, and consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) of 2.67x to 1 as of September this year.

EDC announced in September that it would be returning approximately 15% of equity to shareholders following a tender offer. This followed an August announcement that the Lopezes would sell a minority stake in EDC to a consortium, and the firm may eventually be delisted. – Rappler.com