AYALA-led ACEN Corp. saw its net profit climb to P13.06 billion in 2022, more than double the P5.25 billion a year ago, with its international operations offsetting the decline in the company’s local operations.
“In 2022, the Philippine power sector weathered significant challenges caused by our country’s continued dependence on high-priced coal and unserved power demand, and as a result, we felt the impact of the high cost of power,” Eric T. Francia, president and chief executive officer of ACEN, said in a regulatory filing on Thursday.
The listed energy company said its attributable net income for the year included the P8.6-billion net impact of revaluation gains after it acquired ACEN Australia.
In 2022, ACEN reported a 35.2% increase in its revenue to P35 billion from P25.88 billion a year ago, mainly due to the contributions from its new merchant plants in the Philippines.
Cost and expenses surged to P34.19 billion, 59.2% higher than the P21.47 billion in 2021.
Last year, attributable earnings before interest, taxes, depreciation, and amortization (EBITDA) dropped to P14.3 billion or 5% lower than a year earlier.
“This was due to challenges in Philippine operations, whose contribution to attributable EBITDA dropped 29% year on year to P5.2 billion in 2022,” the company said.
ACEN attributed the decline to the high cost of power amid “net merchant buying” at elevated prices at the Wholesale Electricity Spot Market. It added that typhoon-related curtailment also caused the decline.
It also cited a Supreme Court decision in 2013 voiding the Philippine Electricity Market Corp.’s administered regulated pricing in 2013.
However, ACEN said its international operations managed to offset the decline in local earnings, as EBITDA from its businesses abroad went up by 20% to P9.5 billion, driven by its operations in Vietnam and India.
ACEN’s total attributable output increased by 7% to 5,000 gigawatt-hours (GWh), thanks to its new international assets that had more than a 2,500-GWh share, 30% higher than a year ago.
“Full-year contributions from newly operational Vietnam wind farms and India solar farms drove the growth in [power] generation,” ACEN said in its filing.
Despite the decline in the company’s local operations, ACEN remained optimistic as it expects additional capacity to come online in 2023.
“With 700 MW (megawatts) in new capacity expected to come online in the Philippines by the end of the year, and another 521 MW of new capacity commencing operations in Australia, we expect to move into a net selling merchant position and be on a stronger footing in 2023,” Mr. Francia said.
In 2022, ACEN completed divesting its stake in the 246-MW coal-fired power plant under South Luzon Thermal Energy Corp. through an energy transition mechanism, raising P7.2 billion from the move. Proceeds from the divestment will fund the company’s renewable energy expansion.
To date, ACEN has around 4,000 MW of attributable capacity in the Philippines, Vietnam, Indonesia, India, and Australia.
ACEN has been ramping up the expansion of its renewable energy portfolio. In 2022 alone, it used P50.6 billion as capital expenditure for the construction of 1,300 MW in new solar and wind farms in the Philippines, Australia, and India.
ACEN said that it has over 2,400 MW projects under construction and it is expecting around P50 billion to P70 billion in capital spending in 2023 to expand its renewable energy portfolio.
The company is aiming to reach an RE capacity of 20 gigawatts by 2030.
At the local bourse on Thursday, shares in the company declined by 22 centavos or 3.37% to end at P6.30 apiece. — Ashley Erika O. Jose