MARKET HEADLINE: SHORT SELLING BY OCTOBER

Energy Development Corp. (delisting)
Tinira pa
“If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong.”
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8-14

...bumaba pa pala earnings nito? benta na bago madelist, ok na yan Big Grin

Lopez-led EDC’s recurring profit falls by 21% in first 6 months

ENERGY Development Corp. (EDC) recorded P4.1 billion in recurring net income attributable to equity holders of the parent firm in the first half, down 21% from year ago’s P5.2 billion.

In a statement, the Lopez-led company also reported a 3% decline in consolidated revenues during the period to P17.1 billion from P17.7 in the same period last year.

“Our first half results, similar to what we communicated to the market during our Q1 earnings announcement, were largely dominated by the impact of Typhoon Urduja that hit Leyte island, site of our biggest business unit, in December. Leyte’s generation volume was down by 18.5% for the first 6 months,” EDC Chief Financial Officer Nestor H. Vasay said in a statement.

The company did not disclose its profit and revenue figures for the second quarter, and the comparative data from a year ago.

Mr. Vasay said EDC expects the downtrend to reverse in the second half of the year with its major power plants in Leyte now back in service.

EDC said all its other units posted higher revenues for the period, led by its Burgos wind farm, which recorded a 15% increase to P1.66 billion from P1.44 billion as it “continued to track its record performance last year.”

The Bacman units recorded a 9% rise in revenues to P2.13 billion from P1.95 billion as it benefited from efforts to forge contracts for most of its power generation capacity.

The company said its financial position remained strong with a cash balance of P16.1 billion.

“It maintained a comfortable gearing level with consolidated debt to equity of 1.03 times to 1 and consolidated net debt to EBITDA (earnings before interest, taxes, depreciation, and amortization) of 2.87 times to 1,” it said.

EDC produces 1,472 megawatts (MW) of power from hydro, solar and wind resources, apart from its 1,200 MW of geothermal capacity.


source: http://www.bworldonline.com/lopez-led-ed...-6-months/
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9-18

...delisting/tender offer

EDC allowed to extend tender offer period

ENERGY Development Corp. (EDC) has secured approval from the securities regulator on its request for exemptive relief from compliance with the 60-business day rule to complete its tender offer.

In a disclosure to the stock exchange, the Lopez-led renewable energy company said the approval from the Securities and Exchange Commission (SEC) allows the company to extend the offer period for 20 more business days from Oct. 22, 2018, “if an extension is necessary or desirable” to complete the tender offer.

EDC quoted the SEC’s letter as saying that the commission viewed “that under this situation extending the tender offer period is for the benefit of the Company’s shareholders. Thus granting the extension request is consistent with public interest and protection of investors.”

In August, EDC said it would conduct a tender offer for up to 2,040,006,713 common shares at P7.25 each that are held collectively by the public. The move is ahead of the company’s plan to delist from the stock exchange.

“The intention to eventually delist EDC was shared with the market last year and the tender offer that our board has approved today presents a meaningful opportunity for our minority shareholders to realize their investment prior to the delisting of the company, at a significant premium to the current share price,” EDC President and Chief Operating Officer Richard B. Tantoco stated.


source: http://www.bworldonline.com/edc-allowed-...er-period/
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9-24

Lopez-led EDC says tax reform to hurt renewables

ENERGY Development Corp. (EDC) has called on the government to rethink its plan to remove the incentives currently enjoyed by renewable energy developers, a move which it called misguided the wrong direction for the energy industry.

“I think it’s a misguided policy to remove the incentives from renewable energy just as we need to transition into clean energy,” EDC President and Chief Operating Officer Richard B. Tantoco told reporters during the National Sustainability Summit for Millennials and Gen Zs at the University of Asia and the Pacific over the weekend.

He said from an “energy and sustainability standpoint” the proposed policy could put the company and the entire industry at risk.

EDC produces 1,472 megawatts (MW) of power from hydro, solar and wind resources, apart from its 1,200 MW of geothermal capacity.

“We’re headed in the wrong direction,” he said, adding that he does not mind being quoted on behalf of the company, which was recovering from the devastation of Typhoon Urduja in December last year.

Mr. Tantoco was referring to the government’s so-called Trabaho bill, the second phase of its tax reform program that seeks to lower the corporate income tax.

The bill, the Department of Finance (DoF) said, also corrects the country’s “convoluted” incentives scheme for businesses. The proposed legislation has been approved by the House of Representatives on third and final reading.

The DoF said the “pro-investment” tax reform package would ensure that fiscal incentives remain but performance-based or must commit to meeting targets such as job creation, export sales, countryside growth and research and development.

“If you remove the fiscal incentives, the impact on renewable energy is like you’re taxing it 10 times of coal,” Mr. Tantoco said, adding that renewables are what the country needs to begin its transition from coal-fired power plants.

He described the current times as a period of uncertainty for energy companies.

“It’s a major uncertainty because people are looking at their numbers and then they don’t know whether they’re gonna have 10% income tax or 30[%]. They don’t know if they’re gonna be able to import without duties or with duties. [What] they’re gonna have in the meantime is insecurity,” he said.

“Definitely today with the specter of the bill hanging over the industry’s head, we will see investments slow down,” he added.

The DoF said incentives should also be time-bound, thus tax perks are not granted indefinitely. It said the perks should also be targeted so that only industries that provide multiplier benefits to the economy will be given incentives. It also wants incentives to be transparent to ensure recipients report the perks they get to the government and the public.

EDC Chief Executive Officer Federico R. Lopez said the company had voiced out its views on the removal of the incentives, and that the DoF had been listening.

Mr. Lopez, who is also CEO of First Philippine Holdings Corp., said locators in the holding firm’s industrial park are on a wait-and-see mode ahead of the final outcome of the proposed tax reform.


source: https://www.bworldonline.com/lopez-led-e...enewables/
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9-25

EDC prepares to bid for geothermal concessions in Chile and Peru

LOPEZ-LED Energy Development Corp. (EDC) is preparing to participate in auctions for geothermal concessions in South American countries Chile and Peru, while undertaking initial construction work in a service area it won in Indonesia, its top official said.

“We’re preparing for the auctions in both Chile and Peru,” EDC President and Chief Operating Officer Richard B. Tantoco told reporters over the weekend.

“The system in Chile is the national grid is the one that auctions. There’s an auction next year, second quarter,” he said. “So we’re preparing.”

He said an EDC team based in Chile is in the Philippines to look into “constructibility reviews, EPC (engineering, procurement and construction) pricing reviews.”

Mr. Tantoco described the Chile concession as substantial with a potential capacity of 150 megawatts (MW). He said the foreign country has small geothermal assets in operation at around 30 MW, with an expected expansion by 28 MW and another one of the same size.

“So this (new concession) is gonna be bigger when it eventually gets built out, but it will take time,” he said.

In Peru, the concessions are bigger but its government has set to announce when it would schedule an auction, he said.

“Ang maganda sa Peru (What’s good with Peru is) they auction the capacity by technology,” he said, explaining that separate auctions are held for solar, geothermal and other energy sources with the national grid as the off-taker or the user of the output.

“And then we finally got awarded what they call in Indonesia [as] the PSPE rights,” he said, referring to the Indonesian term for preliminary geothermal survey and exploration assignment. “After all these years.”

He said a PSPE is the equivalent in the Philippines of a renewable energy service contract. He said the awarded rights have a “big potential.”

“We’re doing road constructibility surveys,” he said “If all goes well, drilling [could be] in about 18 to 24 months.”

Mr. Tantoco said EDC is open to partnership with local entities and had been meeting with potential partners in the past five to six years. He said Indonesian laws require a local company to have a stake of at least 5% in a geothermal venture.

In the Philippines, EDC is looking at two geothermal expansion ventures for inclusion in the government’s list of energy projects of national significance (EPNS), he said.

“There’s a couple that we’re hoping will move forward in due course,” Mr. Tantoco said.

He said the projects are an expansion of an existing geothermal projects on Mt. Apo in Mindanao, and an expansion of its Bacon-Manito (BacMan) project.

Asked whether these projects will vie for EPNS certification,” he said: “We’d like to [apply for EPNS] because they’re important.”

Executive Order No. 30 created the Energy Investment Coordinating Council (EICC), which through the Department of Energy approves projects deemed of national significance.

Asked when the company plans to apply, he said: “When we have a higher degree of certainty and confidence on the resource and the fact that the resource is not problematic.”

During the pre-development phase, an EPNS certification entitles the project to all the rights and privileges provided for under EO 30, including action on the application within 30 working days. The executive order was signed by the President in June 2017, while the Energy department issued its implementing rules and regulations in April 2018.

EPNS projects enjoy presumption of prior approval, which means it is presumed to have already complied with the requirements and permits from other government permitting agencies. It will be deemed approved if no action is made five days after the lapse of the 30 working-day period for processing of the application.

Mr. Tantoco said the Mindanao geothermal expansion could reach a capacity of 20 to 60 megawatts (MW), while BacMan could have about 40 to 60 MW.

“We don’t know until we drill the first well,” he said about the exact capacity of the Mindanao expansion.

The Mindanao project is the third phase of its project in the area. The first and second phases have a capacity of 52 MW and 54 MW, respectively. BacMan is also the third phase, after 120 MW in phase one and 20 MW in phase two.

EDC has a total installed energy capacity of 1,457 MW, of which 80% or 1,169 MW come from its geothermal projects.


source: https://www.bworldonline.com/edc-prepare...-and-peru/
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10-2

EDC sees better results in H2 after 21% income decline in H1

LOPEZ-LED Energy Development Corp. (EDC) is expected to perform better in the second half of 2018 after posting a 21-percent decline in net income during the first six months of the year.

“We’re expecting a recovery in the second half. Our return-to-service activities in Leyte have panned out better than our plans. So there’s been a significant acceleration on the return-to-service, and we are optimistic the company will recover both cash flow and profit this second half,” EDC President Richard Tantoco said.

The country’s largest geothermal and wind-energy company posted P4.1 billion in net income from January to June this year, down from the P5.2 billion it reported in the same period a year ago. Revenues also declined to P17.1 billion, down by 3 percent from P17.7 billion in the same period last year.

EDC’s lower-half performance was mainly affected by the damage brought about by Typhoon Urduja last December. The company’s geothermal power-generation volume in Leyte was down by 18.5 percent for the first six months.

“If you look at capacity factors, they are quite low because of natural disasters,” Tantoco said.

EDC operates the Unified Leyte geothermal power facility in the same province. It consists of the 125-megawatt Upper Mahiao plant, the 232.5-MW Matlibog plant, the 180-MW Mahanagdong plant and the 51-MW Leyte optimization plants. It also operates the 112.5-MW Tongonan geothermal facility.

Tantoco said “the capacity for most plants will increase a little bit,” noting that one unit of the Tongonan plant went online last May, three months ahead of schedule.

“We’re spending a lot on resiliency, so the plants will be available,” he said.

The company allocated P7 billion in capital expenditure this year mainly to improve reliability of its steam plants.

The EDC currently delivers 1,472 MW of renewable energy to the country in the form of hydro, solar and wind power apart from geothermal. EDC’s 150-MW Burgos Wind Farm is also the biggest in the country, while its almost 1,200-MW geothermal installed capacity accounts for 61 percent of the country’s total installed geothermal capacity.

Tantoco said the company is looking at geothermal expansion projects that are being seriously considered to be included in the Department of Energy’s  list of energy projects of national significance (EPNS).

“We’d like to apply for EPNS because they’re important,” he said, adding the EDC would formally file its application “when we have a higher degree of certainty and confidence on the resource and the fact that the resource is not problematic.”

This includes an expansion of an existing geothermal project on Mount Apo in Mindanao, and an expansion of its Bacon-Manito (BacMan) project.

The Mindanao geothermal expansion could reach a capacity of 20 MW to 60 MW, while BacMan could have about 40 MW to 60 MW, Tantoco said.

The EDC also said it has effectively attained the sustainability goal of a carbon neutral status.

A report said the company’s operations in the past year resulted in a carbon footprint of just over 790,000 CO2e (carbon dioxide equivalent)—amounting to only 22 percent of the carbon absorption of all the forests it has nurtured and managed in its geothermal reservations since EDC started operations four decades ago, and as part of the Binhi forest-restoration program the company began implementing in 2008.

Such an achievement even makes EDC a carbon-negative enterprise, as industry experts would call it. Also known as being “climate positive,” it means the company has not only achieved climate neutrality or net-zero carbon emissions but has also contributed to removing additional carbon dioxide from the atmosphere.


source: https://businessmirror.com.ph/edc-sees-b...ine-in-h1/
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