ACEN Q1 profit jumps 50% on PSA recoveries, India gains

ACEN CORP. posted a 49.9% increase in first-quarter attributable net income, supported by power supply agreement (PSA) recoveries, India-related gains, and higher electricity revenues.

In a regulatory filing released Tuesday, the Ayala-led energy company said attributable net income rose to P2.92 billion in the January-to-March period from P1.95 billion a year earlier.

Revenue from sale of electricity climbed 42.2% to P10.74 billion from P7.55 billion previously, driven by higher revenues from power supply contracts and power generation and trading activities.

Total attributable renewable energy output rose 32% year on year to 2,230 gigawatt-hours (GWh), while Philippine renewable energy generation increased 29% to 636 GWh due mainly to the recovery of operations in Ilocos Norte as the Pagudpud and Capa wind farms returned to near-full operations.

ACEN said year-on-year results were “significantly influenced by several material, largely non-cash, one-off items.”

Among the key contributors to earnings was the Energy Regulatory Commission’s approval of price adjustments for ACEN’s baseload and mid-merit power supply agreements with Manila Electric Co. (Meralco), allowing the recovery of incremental fuel costs linked to the 2022-2023 coal price surge.

“The approval resulted in a significant positive pre-tax impact on earnings in the period, partially reversing prior margin pressure from elevated fuel costs,” the company said.

The company also benefited from the acquisition of the remaining 50% stake in Unlimited Renewables Holdings B.V. (URH), which resulted in ACEN gaining full ownership of its India platform.

“The transaction generated a gain from remeasurement of the previously held interest and recognition of goodwill, partly offset by the write-off of uncollected guarantee fees from prior years,” ACEN said.

However, ACEN also booked a provision related to developments in Vietnam after state-owned utility Vietnam Electricity (EVN) applied revised payment practices for certain renewable energy projects.

The company said the provision “reflects management’s best estimate of the adverse financial impact based on available information as of the reporting date, and may increase or decrease depending on the final outcome of discussions with EVN.”

ACEN said it had recognized a provision of P1.19 billion to reflect the potential downside impact from reduced future cash flows arising from developments in Vietnam.

The company likewise said goodwill arising from the consolidation of Vietnam Wind Energy Limited Group “was fully impaired in the same period due to prevailing economic and regulatory conditions in Vietnam, resulting in a net negative earnings impact.”

“This volatility creates both urgency and opportunity. Our capital program remains intact, our pipeline continues to advance and our focus on execution will help ensure delivery of long-term, sustainable returns for our shareholders,” ACEN President and Chief Executive Officer Eric T. Francia said.

As of March 31, ACEN had 7,083 megawatts (MW) of attributable renewable energy capacity in operation and under construction. Of the total, 4,293 MW were operational while 2,790 MW were under construction.

The company said its India platform now includes a fully owned 1,059-megawatt direct current diversified portfolio and “a pipeline of nearly 7 GW of renewable energy projects across India,” reinforcing its long-term expansion plans in the market.

“Looking ahead, our priorities remain clear — maximizing output from operating assets, maintaining momentum across our construction pipeline, and managing costs with discipline,” ACEN Group Chief Finance Officer and Chief Strategy Officer Jonathan Back said.

In March, ACEN’s Bijapur Wind project in Karnataka, India secured a 7.517-billion Indian rupee green term loan from Mitsubishi UFJ Financial Group and Sumitomo Mitsui Banking Corp. to partially fund the construction of the project’s 100-MW Phase 1.

The company also disclosed plans to support the development of a 35-MW battery energy storage system project in Zambales through up to P850 million in short-term financing for subsidiary Palauig Solar 1, Inc.

ACEN earlier confirmed a BusinessWorld report stating that its 2026 capital expenditures (capex) could exceed P80 billion, although the quarterly filing did not disclose a final capex target for the year.

On Tuesday, shares in ACEN fell 1.47% or five centavos to close at P3.34 apiece. — Sheldeen Joy Talavera