MANILA, Philippines — After a challenging 2019, the Aboitiz Group sees better prospects next year amid new developments and projects coming on stream, particularly in the power business.
The group has faced a lot of challenges this year, but “new and exciting things” are happening next year, Aboitiz Equity Ventures Inc. (AEV) chief financial officer Manuel Lozano said in a briefing late Wednesday.
“There’s a lot of things to look forward to, we’ve had some challenges. But I think we’ll end the year stronger and that bodes well for the coming year,” he said.
In particular, AEV’s power business under Aboitiz Power Corp. squeezed its profits in the first half due to supply issues that resulted in the high cost of replacement power.
As of the end of September, AEV said net income declined nine percent from January to September to P15.7 billion.
AboitizPower, which accounts for 60 percent of the total income contributions, contributed P10.4 billion or 19 percent lower year-on-year.
“We’ve been beset by plant outages especially during the first half of the year and during summer when usually prices are high,” AboitizPower COO Emmanuel Rubio said.
In the second half, however, the company saw improvements which tempered the decline in sales, revenues, and profit for the full year.
“All of our plants now are operational from July and we were able to sell a significant amount of our capacity when Malampaya went under maintenance for about two weeks. We were net sellers for that period,” Rubio said.
Meanwhile, AboitizPower expects higher availability of its power plants after it has addressed reliability issues of these assets.
“We don’t expect these outages will continue as I’ve said, we’ve put all corrective actions already and so with that, we expect a good performance with regard to availability in 2020,” Rubio said.
For next year, AboitizPower will have new capacities that will start operating and provide capacity for the full year.
Projects available for the whole year include the 2x150-megawatt (MW) Therma Visayas Inc. (TVI) in Toledo, Cebu, the feed-in tariff (FIT) eligible 68.8-MW hydro plant in Manolo Fortich in Bukidnon and the 19-MW La Trinidad hydro power plant in Benguet.
Meanwhile, GNPowerDinginin Ltd. Co. (GNPD) is expected to start operating its first unit by April and the second unit by the fourth quarter next year.
GNPD is the developer and owner of a 2x668 MW supercritical coal plant project in Dinginin, Bataan, wherein AboitizPower increased its stake by acquiring the interest of AC Energy Inc. earlier this year.
These projects will help the company meet its 4,000-MW target next year.
“To date, our net attributable capacity is 3,483 MW (includes TVI Unit 2) and we will definitely hit our goal of 4,000 MW of net attributable capacity by next year. This translates to about 23 terawatt hours (TWh),” Rubio said.
After 2020, AboitizPower has charted its direction in the next 10 years as it targets to deliver 40 TWh of power domestically from its renewables and thermal projects.
A provision of the RE Act, RPS mandates power industry players to produce and source a certain percentage of electricity from RE sources such as biomass, waste-to-energy technology, wind energy, solar energy, run-of-river hydroelectric power systems, impounding hydroelectric power systems, ocean energy, and geothermal energy.
The company will also continue to expand overseas to complement its local operations.
“We will also continue to pursue our international aspirations, specifically in Vietnam, Indonesia, and Myanmar, with focus on renewable projects in wind, hydro and solar, and also look at gas. And when we achieve our RE and international goals, we would have built a 50:50 Cleanergy and Thermal energy mix,” Rubio said.
Tags: Aboitiz Group