Alsons Consolidated Resources Inc. (PSE: ACR), the publicly listed company of the Alcantara Group, has reported that its key projects are all on track for completion starting early next year until 2022, even as revenues in the first half of 2018 fell slightly year-on-year.
These key projects include the second 105-MW section of the 210MW Sarangani Energy Corp. (SEC) baseload coal-fired power plant in Maasim, Sarangani Province, and the 15.1MW run-of-river hydroelectric power plant at the Siguil River basin also in Maasim, Sarangani Province, and the 105MW San Ramon Power Inc. (SRPI) baseload coal-fired power plant in Zamboanga City.
ACR, which is Mindanao’s first and most experienced power producer, disclosed that construction of SEC Section 2 is more than 80% complete and will be commencing commercial operations within the first quarter of 2019. The first 105-MW section of the SEC plant began operating in April 2016 and currently delivers power to more than three million people in the General Santos-Sarangani area and other parts of Mindanao.
SEC 2 is expected to begin commissioning within the last quarter of this year and is set to contribute another 105MW of baseload power to benefit an additional three million residents of South Cotabato, Davao del Sur, Zamboanga del Norte, Zamboanga del Sur, Cagayan de Oro City, and other key areas of the island.
The PhP3.7 billion Siguil Hydro power plant marks ACR’s entry into the renewable energy sphere. It is expected to begin commercial operations in the first half of 2020 and will provide power to Sarangani Province, General Santos City and key municipalities of South Cotabato.
The 105MW SRPI baseload plant, which will provide baseload power to Zamboanga City and other nearby areas, is expected to begin construction in the first half of 2019, and is targeted to commence commercial operations in 2022. The SRPI plant, once operational, will play a crucial role in stabilizing the power grid in the Zamboanga Peninsula.
ACR Chief Finance Officer Robert F. Yenko reiterated the company’s statement earlier this year that ACR’s three key projects will deliver 225.1 additional megawatts to customers and help fuel the growth of Mindanao’s economy.
In its filing with the Philippine Stock Exchange (PSE), ACR disclosed that revenues for the first half of 2018 reached PhP3.48 billion from PhP3.58 billion in the same period last year. Revenues for the period were mainly driven by the operations of SEC Section 1.
Yenko explained that due to higher costs and finance charges this year, net income after tax for the first half of 2018 was at PhP120.3 million, compared to 2017’s PhP190.5 million. Furthermore, general and administrative expenses increased by 9% from PhP172 million to PhP189 million in the first six months of 2018.
On the other hand, ACR’s consolidated earnings before interest taxes, depreciation and amortization (EBITDA) increased by 11% from PhP1.03B in 2017 to PhP1.15 billion in 2018. “The substantial increase in consolidated EBITDA this year highlights our group’s solid operational efficiency,” Yenko stated.
The ACR CFO remains optimistic about future growth prospects, noting that in addition to ACR’s three major projects coming online starting next year, the company is actively pursuing new projects in the Visayas. “Demand for power in the Visayas is likely to grow particularly in light of the economic recovery in Leyte and Samar. We are seriously looking at the Visayas region as a potential market particularly for our diesel capacity,” he noted.
Yenko revealed that SEC Section 2 and SRPI have more than 80% of their capacity contracted, power sales agreements (PSAs) having been secured with key customers early on.
“Securing those PSAs long before many of the new baseload plants even began construction was a key component of our strategy and has helped us in coping with the current power surplus in Mindanao, which has become the new normal in the island,” he said.
ACR also plans to pursue additional run-of-river hydroelectric power projects in Negros Occidental, Sarangani, Davao Oriental, Zamboanga del Norte, the two Agusan Provinces, and Surigao del Sur. These projects have a total hydro capacity potential totaling more than 200MW.
Apart from power generation, ACR is also engaged in property development. The company is developing Azuela Cove in partnership with Ayala Land Inc. (PSE: ALI). A 27-ha project aimed at delivering the best in luxury living in Davao City, Azuela Cove is ALI’s newest master-planned, mixed-use, sustainable seaside estate in the region.
The Azuela project’s centerpiece is The Residences at Azuela Cove, a series of luxury seaside condominium towers and the first Ayala Land Premier residential development in Davao City and Mindanao. The 21-storey North Tower, the first tower of The Residences, has all its 70 units already sold out. Turnover is expected in the first quarter of 2023.