Great Improvement at One of the Philippines’ Largest Power Producers
Background
First Gen Corporation is one of the Philippines’ largest electricity generators.
Most of the electricity is contracted for sale under long-term power-purchase agreements.
It holds a high stake in EDC, the world’s largest integrated geothermal-energy producer.
Including EDC, FGEN has 27 plants as of 2017, all domestically operated.
Business Description
All of FGEN’s revenue comes from electricity generation and related sales, and all of its power facilities are located in the Philippines. The company currently has a capacity of 3,490MW which accounts for 15% of the Philippines’ domestic output.
Most of its electricity generation is sold under long-term power-purchase agreements, including deals with Meralco (MER PM) and the National Power Corporation. These deals help stabilize the return on investment in the facilities.
FGEN plans for establishment of the Philippines’ first liquified natural gas (LNG) terminal. This facility should allow existing gas plants to operate beyond the expiry of gas sales and purchase agreements in 2024 by utilizing imported LNG as fuel. Final decisions are to be made in 2019.
As of 29 November, EDC has been delisted from the Philippine Stock Exchange following the completion of its tender offer to non-major shareholders in October. FGEN is going to hold a higher equity stake in EDC, and become the main vehicle for investors to access the company.
Leadership
Federico Lopez has served as the Chairman and CEO of FGEN since 1998. He is also Chairman and/or Director to First Philippine Holdings Corporation (FPH PM) as well as a number of its other subsidiaries including First Gas Power Corporation, Energy Development Corporation, and Rockwell Land Corporation (ROCK PM). He received his Bachelor of Arts degree in Economics and Internation Relations from the University of Pensylvania, US.
Francis Giles Puno was appointed the role of President, COO, and Executive director of FGEN in 2005. He also holds these positions in FGEN’s parent company, First Philippine Holdings Corporation (FPH PM). His educational background consists of a Bachelor’s degree in Business Management and a Master’s degree in Business Administration from Ateneo de Manila University, Philippines and Northwestern University’s Kellogg Graduate School of Management in Chicago, US.
World Class Benchmarking
Profitable Growth has gradually improved throughout the years, achieving an above average rank of #4 in the past 12 months. FGEN ranked among the top 124 out of 310 large Utilities companies worldwide.
Both Profitability and Growth, similar to Profitable growth, has seen improvements in their ranks since 2014 with Growth showing a higher degree of fluctuation in its ranks.
Asset utilization has consistently been ranked consistently at #6 with an exception of a marginal drop in 2016. Profit margin had improved to an above-average rank in the most recent period.
Sales growth and Margin change have fallen drastically in 2016 and 2017 respectively but they have both recovered since.
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