2015 ANNUAL STOCKHOLDERS’ MEETING PRESIDENT’S MESSAGE First Gen Corporation | www.firstgen.com.ph
AT FIRST GEN, WE CONTINUE TO DREAM AND TO DARE FOR A BETTER, MORE LIVABLE FUTURE OUR STRATEGIC COMMITMENT IS TO SERVE THE GROWING NEEDS OF THE FILIPINO CONSUMER WITH CLEAN, AFFORDABLE ELECTRICITY
FIRST GEN IS FOCUSING ITS EFFORTS TO GROW ITS CLEAN AND RENEWABLE PORTFOLIO, AS WELL AS DEVELOP A WORLD-CLASS LNG TERMINAL WE BELIEVE THAT MAKING DIFFICULT BUT CORRECT CHOICES WILL PAY OFF
FINANCIAL HIGHLIGHTS
FIRST GEN’S ATTRIBUTABLE NET INCOME ENDED AT US$167.3MM IN 2015, LOWER BY 13.3% DUE TO EDC’S HIGHER NON-RECURRING GAINS IN 2014 ATTRIBUTABLE NET INCOME (IN US$ MM) 2015 167.3 IN 2014, EDC BOOKED INSURANCE CLAIMS RELATING TO DAMAGES 2014 SUSTAINED BY ITS TYPHOON-HIT 193.2 PLANTS EDC LIKEWISE BOOKED GAINS ON SALE OF RIG 16 AND REVERSAL OF A PREVIOUS IMPAIRMENT PROVISION ON NORTHERN NEGROS IN 2014 FINANCIALS FINANCIALS
MORE IMPORTANTLY, 2015 WAS A SOLID YEAR AS FIRST GEN’S RECURRING NET INCOME ATTRIBUTABLE TO THE PARENT (RNI) INCREASED BY 6.6% TO US$163.0MM RECURRING NET INCOME (IN US$ MM) 2015 163.0 HIGHER DISPATCH OF SANTA RITA AND SAN LORENZO IN 2015, AND LOWER BUSINESS DEVELOPMENT EXPENSES 2014 152.9 PARTIALLY OFFSET BY LOWER RNI FINANCIALS CONTRIBUTIONS FROM EDC AND FG HYDRO
AVION IS EXPECTED TO START COMMERCIAL OPERATIONS IN 1H 2016 UNIT II (37.5 MW) OF EDC’S 112.5 -MW TONGONAN WENT ON A 4-MONTH UPLANNED OUTAGE DUE TO BLADE FAILURE IN 2015 SAN GABRIEL IS EXPECTED TO START COMMERCIAL OPERATIONS IN 2H 2016
CONSOLIDATED REVENUES SLIGHTLY DECREASED TO US$1.8 BILLION FROM USD$1.9 BILLION IN 2014 AVE. SELLING PRICE OF GAS PLANTS: REVENUES (IN US$ BN) 19.5% TO PHP4.96/kWh 2015 1.8 THE GAS PLANTS BOOKED LOWER FUEL CHARGES FROM DECLINING OIL PRICES 2014 1.9 PARTIALLY OFFSET BY HIGHER REVENUES FROM EDC’S BURGOS FINANCIALS AND GEO PROJECTS, AND HIGHER DISPATCH OF FG HYDRO
EDC SANTA RITA 39% SAN LORENZO 59% 2015 REVENUES FG HYDRO 2% FIRST GAS EDC FG HYDRO (IN US$MM) 2015 2014 Change 2015 2014 Change 2015 2014 Change Revenues 1,076 1,205 11% 709 652 9% 42 37 14% Attributable 124 2% 78 36% 8 1% 121 122 9 Net Income Recurring 118 107 10% 90 93 4% 8 12 33% Net Income
OPERATIONAL HIGHLIGHTS NATURAL GAS 2015 WAS THEMED AN ‘EXECUTION GEOTHERMAL YEAR’ TO DELIVER GROWTH HYDRO PROJECTS AND SAFEGUARD EXISTING PLANTS WIND/SOLAR
NATURAL GAS IN 2015, BOTH SANTA RITA AND SAN LORENZO PERFORMED STEADILY AND RELIABLY 2015 GENERATION SANTA RITA : 7,388 GWh 17.5% SAN LORENZO: 3,725 GWh 7.2% UNIT 40 RETURNED TO OPERATION AFTER MAIN TRANSFORMER BREAKDOWN IN 2014 PRUDENT PLANNING AND PROPER SCHEDULING FOR RECEIVING LIQUID FUEL ENABLED THE CONTINUED OPERATIONS OF THE GAS PLANTS THE 1000-MW SANTA RITA AND 500-MW SAN LORENZO GAS-FIRED PLANTS
NATURAL GAS AVION IS CURRENTLY COMMISSIONING AND IS EXPECTED TO ACHIEVE COMMERCIAL OPERATIONS IN 2Q 2016 IN EARLY 2016, AVION’S EPC CONTRACT WITH IEG AND EPC WAS TERMINATED. A COMPLETIONS WORK CONTRACT WITH MTU BB WAS EXECUTED LAST MARCH 2016 AS OF TODAY, UNIT 2 HAS EXPORTED UP TO 47.5MW OF POWER, WHILE UNIT 1 IS CURRENTLY UNDERGOING PRE-SYNCHRONIZATION SETTINGS AND TESTING THE 97-MW AVION GAS-FIRED PLANT IN BATANGAS CITY
NATURAL GAS SAN GABRIEL WAS MECHANICALLY COMPLETED BY END-2015. ONCE IT STARTS OPERATING IN 2H 2016, IT WILL BE THE MOST EFFICIENT NATURAL GAS PLANT IN SOUTHEAST ASIA LAST APRIL 13, 2016, SAN GABRIEL WENT ONLINE FOR THE FIRST TIME, EXPORTING UP TO 60 MW TO THE GRID SAN GABRIEL WILL RE-SYNCHRONIZE TO THE GRID TO ACHIEVE A FULL LOAD OF 414 MW THE 414-MW SAN GABRIEL GAS-FIRED PLANT IN BATANGAS CITY
GEOTHERMAL GEOTHERMAL OUR MAIN FOCUS IN OUR GEOTHERMAL PLATFORM WAS TO IMPROVE THE RESILIENCY AND RELIABILITY OF OUR PLANTS
GEOTHERMAL IN 2015, THE GEOTHERMAL ASSETS’ OUTPUT IMPROVED PRIMARILY DUE TO NASULO’S FULL YEAR OPERATIONS AND BACMAN’S HIGHER DISPATCH OUTPUT IMPROVED BY 5.4% TO 7,755 GWh IN 2015 BACMAN’S RETROFIT PROGRAM EDC COMPLETED THE 49.4-MW NASULO INCREASED ITS CAPACITY BY GEOTHERMAL PLANT IN JULY 2015 10 MW TO 140 MW
GEOTHERMAL TONGONAN’S 37.5 -MW UNIT II OUTAGE: EDC’S HIGHER ELECTRICITY OUTPUT IN 2015 WAS SLIGHTLY TEMPERED BY TONGONAN UNIT II’S FOUR - • UNPLANNED OUTAGE FROM MARCH TO JULY 2015 DUE MONTH UNPLANNED OUTAGE TO BLADE FAILURE IN ITS STEAM TURBINE ROTOR • ORDERED RETROFIT KITS IN JANUARY 2015 • REHAB PROGRAM IS EXPECTED TO INCREASE OUTPUT BY 10 MW ONCE COMPLETED IN 2H 2017
HYDRO HYDRO DISPATCH OF THE 132-MW PANTABANGAN- MASIWAY INCREASED BY 4.2% TO 259.2 GWh IN 2015, AS A RESULT OF TWO UNEXPECTED TYPHOONS IN 4Q 2015 THE 132-MW PANTABANGAN-MASIWAY HYDRO PLANT IN NUEVA ECIJA
FG HYDRO’S 12 -MW MASIWAY COMPLETED ITS REHAB PROGRAM TOWARDS THE END OF 2015
WIND/SOLAR WIND AND SOLAR THE 150-MW BURGOS WIND PROJECT IS THE LARGEST WIND PROJECT IN THE COUNTRY BURGOS WIND NOW ENJOYS FULL DISPATCH FOLLOWING THE COMPLETION OF THE SAN ESTEBAN TRANSMISSION LINE IN SEPT 2015 THE 150-MW BURGOS WIND PROJECT IN ILOCOS NORTE
WIND/SOLAR 2015 WAS THE YEAR WHERE SOLAR WAS ADDED TO THE PORTFOLIO AS OF TODAY, EDC HAS A TOTAL SOLAR CAPACITY OF 6.8 MW 6.8-MW BURGOS SOLAR PROJECT 4.16-MW BURGOS SOLAR: COD: MARCH 2015 FiT* RATE: PHP9.68/kWh 2.66-MW BURGOS SOLAR PHASE 2: COD: JANUARY 2016 THE 6.8-MW BURGOS SOLAR PROJECT IN FiT* RATE: PHP8.69/kWh ILOCOS NORTE *Feed-in-Tariff
BUSINESS DEVELOPMENT
IN PREPARATION FOR THE MALAMPAYA FIELD’S EVENTUAL EXHAUSTION, WE PURSUED AND HEIGHTENED OUR PLANNED DEVELOPMENT OF AN LNG TERMINAL LNG TERMINAL PROJECT COST: UP TO US$1 BILLION THE TERMINAL IS IN ITS THIRD FRONT-END ENGINEERING DESIGN REVISION AND POTENTIAL PARTNERS HAVE STARTED TO BE ENGAGED
FIRST GEN REMAINS BULLISH IN DEVELOPING ITS HYDRO PORTFOLIO. THE COMPANY IS SCALING UP ITS EXPERTISE TO START BUBUNAWAN’S CONSTRUCTION IN 2016 RUN-OF-RIVER HYDRO PROJECTS: 32-MW BUBUNAWAN 30-MW PUYO 40.5-MW TAGOLOAN
CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY
MARINE BIODIVERSITY CONSERVATION AND PROTECTION PROGRAMS OF FIRST GEN WE REMAIN COMMITTED TO A BETTER AND INCLUSIVE FUTURE BINHI: EDC’S REFORESTATION OF PRIME ENDANGERED PHILIPPINE TREE SPECIES IN NEGROS ISLAND
SCHOOL REBUILDING PROGRAM FOR SCHOOLS DAMAGED BY TYPHOON YOLANDA CONSERVATION EFFORTS ON BOTH TERRESTRIAL AND MARINE SPECIES AT THE BIODIVERSITY CENTER IN PANTABANGAN-MASIWAY
THE AGREEMENTS MADE DURING THE COP 21 HAS CHANGED THE VIEW OF GOVERNMENTS AND INDUSTRIES ON CLIMATE CHANGE THE AFTERMATH OF SUPER TYPHOON YOLANDA IN LEYTE
FIRST GEN CONTINUES TO DEVELOP CLEANER SOURCES OF ENERGY. THE COP 21, AS WELL AS THE PARTICIPATION OF 198 COUNTRIES, ONLY REAFFIRMS OUR COMMITMENT
“We welcome the historic agreement that has just been reached in Paris. The world has come together to forge a deal that finally reflects the aspiration, and the seriousness, to preserve our planet for future generations. We called for strong ambition, for remarkable partnerships, for mobilization of finance, and for implementation of national climate plans. Paris delivered. Now the job becomes our shared responsibility .” -World Bank Group President Jim Yong Kim at COP 21 in Paris
“ We have no time to waste. Delay is not an option. We have to wake up once again from the fog of success – political successes must lead quickly to action and implementation .” -World Bank Group President Jim Yong Kim at Climate Action 2016 Summit in Washington, DC
SUSTAINABILITY IN BUSINESS IS NOT JUST ABOUT THE FINANCIAL IMPACT, BUT ABOUT THE ENVIRONMENTAL AND SOCIAL IMPACT AS WELL WITH SUSTAINABILITY IN MIND, FIRST GEN CONTINUES TO PRIORITIZE INVESTMENTS IN CLEAN AND AFFORDABLE ELECTRICITY
FIRST GEN WILL CONTINUE TO REMAIN RELEVANT, EFFECTIVE, PIONEERING AND SMART … IN MOVING TOWARDS A DECARBONIZING WORLD FIRST GEN CONTINUES TO CARE …WE WILL CONTINUE TO DARE TO MAKE POSITIVE CONTRIBUTIONS
2015 ANNUAL STOCKHOLDERS’ MEETING PRESIDENT’S MESSAGE First Gen Corporation | www.firstgen.com.ph
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