ENERGY companies are expected to deliver mixed results for the first quarter (Q1), according to analysts, with one fund expert saying that the period tends to be generally weaker for the sector.
“From a seasonality standpoint, the first quarter tends to be generally weaker for power companies than other quarters due to cooler weather (less public power consumption) and lack of rain (vital for hydro plants),” Marvin V. Fausto, president of COL Investment Management, Inc., said in an e-mail to BusinessWorld on April 5.
Regina Capital Development Corp. Head of Sales Luis A. Limlingan said power generation companies are expected to see a low single-digit increase or decrease in their net income depending on the contracted capacity mix.
For the first quarter and for the full year 2023, energy companies are expected to deliver a year-on-year increase in revenues, while bottomline performance “could go both ways,” he said in a phone message on April 3.
Meanwhile, RCBC Securities, Inc. head of research Ma. Jidgette Velasco said that the energy sector has a somewhat bleak outlook for this year.
“For 2023, we expect a generally flattish year in earnings results as the power supply outlook remains bleak with the lack of additional power supply,” Ms. Velasco said in an e-mail on April 4.
Last year, almost all of the country’s listed energy companies delivered higher income due to increasing demand, higher electricity sales, and strong revenues.
In 2022, Semirara Mining and Power Corp. posted a record-high net income of P39.9 billion more than double the P16.2 billion recorded a year earlier, on strong domestic coal shipments and higher electricity sales at the spot market.
Manila Electric Co. (Meralco) registered a P27.11 billion consolidated core net income, up 10.2% from P24.61 billion a year earlier on strong energy sales.
Aboitiz Power Corp. reported a 27.4% increase in core net income to P26.5 billion in 2022 from P20.8 billion a year earlier due to contributions from its coal-fired plants.
Meanwhile, the international operations of ACEN Corp. boosted its net income to P13.06 billion in 2022, more than double the P5.25 billion a year ago, offsetting the decline in the company’s local operations.
First Gen Corp. reported a net income of $265 million (P14.3 billion), or 5% higher than the $252 million (P12.4 billion) in 2021, as the company’s renewable platforms delivered higher earnings.
Ms. Velasco noted that Aboitiz Power and Meralco had better-than-expected performance in 2022 “given their strong sales volume and AboitizPower’s effective comprehensive hedging program.”
Semirara, despite posting a record-high net income, underperformed from rising shipping and fuel costs, she added.
“Semirara missed our estimates primarily from the rise in shipping and fuel costs. ACEN also underperformed as it kept its net-buying position in the spot market, where prices have been elevated due to the insignificant additional power supply and Malampaya’s depleting gas fields,” Ms. Velasco said.
COL Investment Management’s Mr. Fausto expects better earnings for the power sector this year. “Growing demand amidst a potentially tight supply environment translates to higher pricing opportunities for the power companies.” — Ashley Erika O. Jose