ASEAN KEY DESTINATIONS
EDC sets P14-B 2016 capex
PHILIPPINES: Lopez-led Energy Development Corp. (EDC) is allotting up to P14 billion in capital expenditures (capex) this year to improve the reliability of its existing power plants, and expand its portfolio in renewable energy.
On top of EDC’s capex, the company is also planning to raise as much as P5 billion through loans at the latter part of this year.
Nestor Vasay, EDC chief financial office told reporters that the company set a higher capex this year, as bulk of which will go to the refurbishment of its existing plants like the Tongonan Geothermal Plant.
The company had claimed recently that its 2015 revenues fell short of target primarily due to reliability issues at the Tongonan Geothermal Plant.
“Right now, the focus really is in Tongonon because last year, it costs us about P700 million in foregone revenues when it went down last year for six months so we want to put investments on that to boost its reliability,” Richard Tantoco, EDC president and chief operating officer told reporters.
For that alone, Tantoco said EDC would be investing around P4.3 billion and the refurbishment would take about almost half a year to finish.
Nevertheless, he made sure that while the company does that, it also will not stop with its existing expansion plan.
“What we’re doing on the expansion projects, whether it’s overseas or solar, wind, or geothermal, regardless of what we are looking at… we are not stopping but we won’t really spend on drilling right now,” he said.
Tantoco also said that internally, the company has P18 billion in cash so there is no need for an immediate fundraising.
But then, he also mentioned that at the latter part of the year, EDC may raise as much as P5 billion through loans.
“We also have a major refinancing planned at the later part of this year, which is close to P5 billion and that would be around this year, most probably at the second half of the year,” Tantoco said, adding that the deal would only involve local banks.
Last year, the company spent capex of about P12 billion.
The income of EDC fell 35 percent in 2015 due to absence of a one-time gain and foreign exchange losses, outshining the higher energy sales it recorded in the prior year.
A disclosure filed with the Philippine Stock Exchange last week showed that inclusive of non-recurring items, EDC’s consolidated net income attributable to equity holders of the Parent stood at P7.6 billion, 35 percent lower than the P11.7 billion the company had in 2014.
“The decrease was primarily driven by the absence in 2015 of a P2.1 billion impairment reversal recorded in 2014 for the Northern Negros power plant and higher foreign exchange losses of P1.3 billion in 2015 brought about by the depreciation of the peso against the US dollar,” EDC told the local bourse.
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