PHINMA Energy Corp.

Phinma Energy’s bottom line plunges to 75%

PHINMA Energy Corp.’s net income plunged 75 percent to P347 million last year, from P1.383 billion in 2016.

In its disclosure to the Philippine Stock Exchange, Phinma Energy said the “margins in the electricity supply business were challenged by continued low market prices due to the competitive supply environment.”

The company, formerly Trans-Asia Oil and Energy Development Corp., said the income it registered in 2016 was mainly due to several transactions that year.

For one, it was in December 2016 when the company booked a P472-million gain on the sale of its 5-percent share in South Luzon Thermal Energy Corp. to Axia Power Holdings Philippines Corp. The company also sold that year transmission lines in Guimaras and La Union to the National Grid Corp. of the Philippines.

Also in 2016, Phinma Energy booked approximately P830 million in recurring income from electricity supply and income generated from independent power producers, and P81 million in financial and other income.

Despite a dismal performance last year, Phinma Energy ended 2017 as the second-largest single electricity supplier with a market share of 12.2 percent. The company also declared regular dividends of P0.04 per share for shareholders as of record date of March 14 and payment on April 5.

The company earlier entered into a Solar Energy Service Contract with the Department of Energy, granting it the exclusive right to explore, develop and utilize the solar energy resource in a 648-hectare area in the municipality of Bugallon, Province of Pangasinan.

“Predevelopment activities, such as yield assessment, environmental-impact study and system-impact study are under way and are expected to be completed within the year,” it said.

The term of the service contract is 25 years, extendable for another 25 years.



PHINMA Energy to enter downstream oil sector

CONGLOMERATE Phinma Corp. said its unit PHINMA Energy would be venturing into the downstream oil industry.

PHINMA Energy’s entry into the downstream sector could potentially help cater “to the fuel requirements of its own diesel plants,” the parent company told the local bourse on Monday.

The listed holding firm noted PHINMA Energy would remain on the lookout for “greater participation in the retail electricity market using its existing portfolio of generating plants.”

PHINMA Energy will continue to “develop additional conventional and renewable energy projects as market and regulatory conditions merit” amid its target to be the “preferred electricity supplier of choice” in the country.

“Moving forward, Phinma Energy recognizes the need to diversify its generating portfolio, particularly in light of an oversupply in baseload coal plants foreseen over the next several years,” it said.

In October last year, Phinma Energy revealed plans to explore opportunities and expand its portfolio with gas and hydropower projects.

PHINMA President and Chief Executive Officer Francisco Viray told reporters the company was mulling putting up four power plants–three gas-fired and one hydroelectric–with a total capacity of 925.6 megawatts.
These projects are the 383-MW Sta. Ana CCGT power plant in Cagayan, the 383-MW Sual CCGT floating power plant in Pangasinan; the 138-MW Argao floating CCGT power plant in Cebu, and the 21.6-MW Ilog hydroelectric power plant in Negros Oriental.



Phinma enters fuel-supply business
PHINMA Energy Corp. is going into the fuel-supply business that will primarily serve the requirements of its energy arm.

During the company’s stockholders’ meeting on Wednesday, Phinma announced that its subsidiary, One Subic Oil Distribution Corp., will enter the fuel- supply business as a means of mitigating the domestic fuel-supply risk.

The entry into this business will provide the company with an immediate diversification platform.  In the future, Phinma President Francisco Viray said the company “will exploit opportunities along the value chain.”

At end-2017, One Subic Oil completed commercial and technical analysis of this new business venture. It is currently securing the permits necessary to initiate the short construction period for the required facility.

Viray said the business will be operational within the year.

“We are just waiting for the necessary permits from Subic Bay Metropolitan Authority.. But it will be this year,” he added.

The facility will initially be able to accommodate 16 million liters of  fuel. Phinma’s energy requirements to fuel some of its peaking plants is estimated to use up 50 million liters. These include the plants of CIP II Power Corp., Phinma Power Generation Corp., One Subic Power Generation Corp. and power barges 101 and 102.

Phinma’s diesel plants, officials said, they will continue to be  a valuable source of power to the Luzon grid.  Diesel plants are capable of being dispatched immediately at short notice, making them suitable for ancillary-service operations.

Phinma’s total attributable capacity in 2017 stood at 636.4 megawatts from 639.4 MW in 2016.



PHINMA Energy withdraws from geothermal service contract in Leyte

PHINMA Petroleum and Geothermal, Inc. (PPG) has announced its withdrawal from a service contract that sought to explore the possibility of geothermal energy in Leyte.

As reported by Business World Online in the Philippines, PHINMA Petroleum and Geothermal, Inc. (PPG) has announced its withdrawal from a service contract that sought to explore the possibility of geothermal energy in Leyte to the stock exchange in Manila.

The energy exploration company, a unit of Phinma Energy Corp., said it would recognize a loss of P32.7 million ($620,000) for the write-off of its share in expenditures incurred so far in Service Contract No. 51 (SC 51) in Eastern Visayas. “This is equivalent to 22% of the Company’s total assets as of March 31, 2018,” the company said.

PPG has also informed the Securities and Exchange Commission on Wednesday that it had notified the Department of Energy (DoE) of its withdrawal from SC 51.

The company has a 6.67% participating interest in SC 51, but the stake could have been adjusted to 33.34% upon the DoE’s approval of the withdrawal of its original operator Otto Energy Investment Ltd., a unit of Australia-listed Otto Energy Ltd.

Otto Energy on May 5, 2014 notified PPG and the other partners in the consortium that it had elected to withdraw from SC 51, a move which is subject to DoE approval.

On June 28, 2014, the Filipino partners requested the DoE to suspend exploration for a phase of the project from the date of Otto Energy’s withdrawal and until the approval of the company’s participating interest to the locals.

In March and December last year, the Filipino partners reiterated their intent to carry on with the exploration of SC 51. They further signed a deed of undertaking to pay the outstanding financial obligation of Otto Energy amounting to $124,763.

Otto Energy started in April 2012 a 100 km seismic program in the town of San Isidro, Leyte to pick the optimum location for the drilling of exploration block’s prospect.



...loss din ang report nito Sad

Phinma Energy swings to net loss in April-June

PHINMA Energy Corp. on Wednesday reported a net loss attributable to equity holders of the parent firm of P91.57 million in the second quarter, reversing last year’s income of P221.87 million in the same quarter last year as revenues slipped while cost and expenses rose.

Revenues during the quarter stood at P4.42 billion, lower by 6.2% compared with the P4.71 billion recorded in the same three months last year. Cost and expenses went up 4.3% to P4.89 billion from P4.69 billion a year ago.

In the first half, Phinma Energy posted a net loss of P48.26 million, a reversal of last year’s P300.29 million net income attributable to the parent firm’s equity holders.

Revenues during the semester fell to P8.13 billion, lower by 2.3% compared with the P8.32 billion recorded in the same six months last year. Cost and expenses increased by 5.6% to P8.70 billion from P8.24 billion previously.

Including non-controlling interest, the company said consolidated net loss during the first six months was at P76.41 million from a net income of P298.17 million a year ago.

It attributed the reversal to the “continued low prices in the competitive energy supply market as well as higher costs resulting from excise taxes imposed by the TRAIN Law,” referring to Republic Act 10963 or Tax Reform for Acceleration and Inclusion.

“In 2018 the company also recognized P80 million in actual and provisional costs on soon-to-expire oil and gas service contracts. Moving forward, the Company will continue initiatives to improve margins by expanding its wholesale customer portfolio and lowering its cost of power,” Phinma Energy said in a statement.

South Luzon Thermal Energy Corp., a 45%-owned affiliate, generated 817 gigawatt-hours (GWh), translating in a net income of P827 million in the first half and paying P500 million in dividends.

Another affiliate Maibarara Geothermal, Inc. started operating its second geothermal unit in March 2018, producing a total of 77 GWh of geothermal energy from its two units during the semester.

The company’s subsidiary Phinma Renewable Energy Corp. produced 53 GWh of clean energy from its 54-megawatt (MW) wind farm in San Lorenzo, Guimaras. It registered P115.8 million in net income in the first semester.

Phinma Energy said it continues to pursue renewable energy projects, including a 40-MW expansion of its wind farm in Guimaras as well as a 45-MW solar farm in Padre Garcia, Batangas.

“Negotiations with offtakers on bilateral contracts for these projects are on-going,” it said.

The company said it had joined forces with sister company Union Galvasteel Corp. to promote solar rooftop generation, with an installation completed in Phinma Cagayan de Oro College. Phinma University of Pangasinan will follow by end-August.



Phinma Energy sells 50% stake in solar subsidiary

PHINMA Energy Corp. has sold half of its stake in a solar roofing subsidiary to an affiliate in part to boost the unit’s capital base, while taking in a strategic partner with a complementary business.

In a disclosure to the stock exchange, the energy company said the sale of its 50% interest in subsidiary Phinma Solar Energy Corp. to Union Galvasteel Corp. was approved by its board on Nov. 6, 2018.

With the deal, Phinma Solar, formerly Trans-Asia Wind Power Corp., would be able to increase its capital base while Phinma Energy said “it will add a strong strategic partner who is a leader at complementing industry (roofing) and who possesses an extensive client base, and established nationwide distribution lines.”

It placed the initial payment for the sale at P180 million, with the balance upon the issuance of a Bureau of Internal Revenue clearance “or at a later date agreed by the parties in writing.”

Phinma Energy did not state the balance due but it said the number of shares to be sold are 225 million priced at P1 apiece. The disclosed price per share values the deal at P225 million, or a balance of P45 million after the initial payment.

Phinma Solar, a 100% subsidiary of Phinma Energy before the deal, is engaged in renewable energy generation, specifically focusing on solar rooftop generation.

“With its partner, PHINMA Solar will be technically and financially more capable to pursue its projects,” said Phinma Energy.


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...was waiting for this to drop below 1.00 before picking up sana tsk

Ayala acquires Phinma Energy

AC ENERGY, Inc. is taking control of Phinma Energy Corp. through a “mutually strategic agreement” that gives the Ayala-led company a 51.48% stake in the listed energy firm for P3.42 billion.

In a joint statement on Wednesday, the two groups said the Ayala’s energy platform will acquire the combined stake of Phinma Corp. and its parent Philippine Investment Management, (Phinma) Inc. in Phinma Energy subject to regulatory approvals.

Jaime Augusto Zobel de Ayala, chairman and chief executive of Ayala Corp., described the Phinma group as “one of our early partners when Ayala was new to the power sector.”

“This partnership has prospered over the last eight years and we welcome the opportunity to now integrate Phinma Energy into AC Energy’s platform as we grow our presence in the power generation sector,” he said.

Ramon R. del Rosario, Jr., Phinma president and chief executive, said the two groups “have always enjoyed a strong partnership, making this agreement a welcome culmination of our joint initiatives in the energy sector, as we believe AC Energy is best-positioned to grow the business and take it to the next level.”

Mr. del Rosario said Phinma will now focus on its education and construction materials business.

The agreement, which was approved by both groups on Tuesday, involves the sale by listed holding firm Phinma Corp. of its 1,283,422,198 shares or 26.25% in Phinma Energy for P1.75 billion based on the unit’s implied 100% equity value of P6.65 billion. The shares will be sold through the stock exchange.

Phinma Corp. and its parent will then cause Phinma Energy to approve the issuance of 2,632,000,000 in new shares, to which AC Energy will subscribe.

Parent firm Phinma will also sell its 25.23% interest in the energy subsidiary.

“The estimated proceeds from the sale in the amount of P1.7 billion will be used to focus investments in other sectors such as education and construction materials as opportunities arise,” Phinma Corp. said.

The groups said the valuation date was as of Dec. 31, 2018 and is subject to adjustments.

The transaction will result in a loss on sale of P368 million subject to adjustments but will allow Phinma Corp. to avoid significant losses from the energy business in the future, it said.

The deal’s closing is subject to the satisfaction of certain conditions, such as regulatory approvals, including the approval of the Philippine Competition Commission, and compliance with applicable tender offer requirements.

AC Energy and Phinma Energy first teamed up in 2011 when they developed, built and started operating the 244-megawatt (MW) net capacity coal power plant in Calaca, Batangas under South Luzon Thermal Energy Corp.

Eric T. Francia, AC Energy president and chief executive, said the transaction was an “important step” for the company in hitting its 5-gigawatt (GW) renewable energy installation target by 2025.

He said the Phinma Energy platform “has significant operating and developmental renewable energy assets, and its large diesel capacity will complement the scaling-up of our renewable projects.”

Sought for comment, Luis A. Limlingan, business development head at Regina Capital Development Corp., said the deal is indeed an important step for AC Energy to achieve its target energy capacity.

On AC Energy’s possible entry into the stock market, he said: “That may be one angle to look at as a possible backdoor listing but does not seem likely yet.”

On Wednesday, shares in Phinma Corp. rose 1.21% to close at P8.99 each, while those of Phinma Energy gained 8.46% to end the trading day at P1.41 each.

AC Energy owns around 1.7 GW of generation capacity in operation and under construction based on its equity interest in power generation businesses. It generated 2,800 GW-hours of energy last year, of which 48% was from renewable sources, the company said.

Phinma Energy has an attributable generation capacity of 472 MW. It is the third-largest stand-alone retail electricity supplier serving 378 MW of customer demand.

It holds interests in the following entities: Phinma Power Generation Corp. (100%); Phinma Renewable Energy Corp. (100%); CIP II Power Corp. (100%); One Subic Power Generation Corp. (100%); One Subic Oil Distribution Corp. (100%); Phinma Solar Corp. (60%); Phinma Petroleum and Geothermal, Inc. (50.74%); Palawan Exploration and Production Corp. (30.65%); South Luzon Thermal Energy Corp. (45%); and Maibarara Geothermal, Inc. (25%).



Ayala unit expects to sign Phinma Energy deal soon

AC Energy, Inc. expects to sign in a few days the definitive agreement to acquire the majority stake in Phinma Energy Corp. to move the deal forward for approval by the antitrust watchdog ahead of the “specific strategies” for the acquired assets, including a stalled liquefied natural gas (LNG) import terminal, its top official said.

“We expect to sign the definitive documents fairly soon, within the next few days, so that’s the next step and then soon after that we will file for PCC (Philippine Competition Commission) approval,” Eric T. Francia, AC Energy president and chief executive officer, told reporters.

Mr. Francia said the company expects to complete the deal for Phinma Energy by mid-year.

“So we’re probably looking at the middle of the year — May, June, July maybe, that area — in terms of getting PCC regulatory approval and then we have to make the mandatory tender offer, which typically takes 90 days,” he added.

On Jan. 9, AC Energy announced that it had signed a “mutually strategic agreement” with Phinma Energy that gives the Ayala-led company a 51.48% stake in the listed energy company for P3.42 billion.

Mr. Francia said PCC takes about 60 to 90 days in approving a project before it moves to a second phase of approval process that takes another 60 days or so.

“It will really depend on the results of the tender offer because if no one tenders, the minimum that AC Energy would effectively be guaranteed is around 68%. That’s how the deal was structured,” he said.

The deal calls for the sale by listed holding firm Phinma Corp. of its 1,283,422,198 shares or 26.25% in Phinma Energy for P1.75 billion based on the unit’s implied 100% equity value of P6.7 billion.

Phinma Corp. and its parent Philippine Investment Management (PHINMA) Inc. will then prompt Phinma Energy to approve the issuance of 2,632,000,000 in new shares, to which AC Energy will subscribe. The parent firm will also sell its 25.23% interest in the energy subsidiary.

Mr. Francia said the resulting stake of AC Energy after the subscription to the new share could reach 68%, “and then on top of that as and when the public tenders, that 68% can go up.”

He declined to say how the deal would result in beefing up the installed energy capacity attributable to the company, citing the pending approvals.

“Phinma Energy is about a little over 400 megawatts (MW) on a 100% basis, so it really depends on how much Phinma Energy we will get, post tender offer,” he added.

Asked about the pending LNG project of Phinma Energy, Mr. Francia said: “We will study that. We’ve always been keeping our minds and eyes open to LNG although I could tell you that there’s nothing imminent or specific.”

“It’s still very challenging to justify project economics, especially in a competitive market situation. You really need very big or strong balance sheets to back that in the absence of long-term power purchase agreements. It makes it very very challenging. But we keep an open mind,” he added.

In April last year, Phinma Energy unit Phinma Petroleum and Geothermal, Inc. told stockholders that it was developing an LNG facility with a 120-MW power plant in Argao, Cebu province, which company officials expected to be completed by 2022 to 2023. They later said the project was on hold ahead of better electricity prices. 



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