ACEN net income surges close to 2x to Php4.2 billion in the first half of 2023

ACEN (PSE: ACEN), the energy platform of the Ayala group, today reports that its consolidated revenues for the first half of 2023 rose 28% to Php20.5 billion. This was driven by the boost in net generation due to the stronger wind regime throughout the period and higher operating capacity with testing and commissioning of new projects, which allowed ACEN to achieve a net selling merchant position, amid strong prices in the Philippine Wholesale Electricity Spot Market (WESM).

ACEN’s consolidated net income surged 94% year-on-year, reaching Php4.2 billion during the period, as it emerged from the headwinds it experienced in the first half of 2022. The company’s strong performance was accompanied by a rise in overhead, as ACEN ramped up manpower in support of the acceleration of its renewables expansion.

Financial and Operating Highlights

Attributable earnings before interest, taxes, depreciation, and amortization (EBITDA), which includes ACEN’s share of EBITDA from non-consolidated operating associates and joint ventures, rose 20% to Php9.4 billion in the first half of 2023.

Boosted by a strong Northern Luzon wind regime and the portfolio’s swing to a net seller position, Philippine operations contributed Php4.1 billion to EBITDA, a 48% rise year-on-year. Meanwhile, International EBITDA grew 17% to Php5.5 billion with stronger wind resources and the ongoing commissioning of the 521 MWdc New England Solar farm in Australia, supported by carbon credit sales in Vietnam.

Total attributable renewables output showed double-digit growth, rising 21% to 2,052 GWh in the first half of 2023, without the impact of the Visayas curtailment experienced in the previous year.

Renewables generation from Philippine operations increased by a noteworthy 30% to 568 GWh, on the back of a strong wind regime, and with the commissioning of the country’s largest wind farm to date, the 160 MW Pagudpud Wind farm in Ilocos Norte, as well as of the 44 MWdc second phase of the Arayat-Mexico Solar farm in Pampanga.

ACEN’s International portfolio generated 1,483 GWh, a 17% rise from 2022, driven by strong wind resources in Vietnam, alongside improved capacity factors in Indonesia, and the ramp-up of commissioning offtake for the 521 MWdc first phase of New England Solar in New South Wales, Australia.

Eric Francia, ACEN president and CEO, said: “Our growth continues to be robust midway through 2023. We’ve made considerable progress with the continued ramp-up of our projects, helping provide much-needed supply to the Philippines and across the region. This has transitioned us to a net selling position in the Philippine spot market and strengthened our financial performance.”

Strong Balance Sheet

Consolidated assets rose 4% to Php242.7 billion, while long-term investments grew 19% to Php130.7 billion as the company continued to scale up its renewables portfolio, with 2.7 GW currently under construction. Total liabilities grew by 15% to Php95.5 billion with more borrowings to fund renewables expansion during the period. Nevertheless, the company’s leverage ratios remain strong at a gross debt-to-equity (D/E) ratio of 0.52x and net D/E of 0.29x.

Cora Dizon, ACEN chief financial officer, said: “We continue to expand our funding sources and optimize ACEN’s capital structure, while keeping track of our leverage ratios, as we aggressively pursue new investments in line with our growth aspirations.”

Portfolio Expansion

ACEN continues to move toward its target of achieving 20 GW in attributable renewables capacity by 2030. Currently, the company has a diversified portfolio of 4.3 GW in renewable energy, both operational and under construction, with 1.6 GW in the Philippines, 1.0 GW in Australia, 0.9 GW in Vietnam and Lao People’s Democratic Republic, 0.5 GW in India, and 0.3 GW across Indonesia and other markets.

In June, ACEN, through its subsidiary, ACEN Vietnam Investments Pte. Ltd., moved forward in signing the Shareholders’ Agreement and other definitive agreements for the closing of the first phase of its acquisition of a stake in Super Energy Corporation Public Company Limited’s solar power business in Vietnam through Solar NT. This strategic partnership follows the share purchase agreement signed by the two companies in 2022. ACEN will take up 49% of Solar NT’s 837-MW portfolio of operating solar assets for a total consideration of USD165 million through a phased acquisition. The closing of the transaction’s first phase had just been completed, adding 141 MW of attributable capacity to ACEN’s portfolio. The remaining phases are expected to be finalized within the year.

In July, ACEN, through its subsidiary, ACEN Investments Australia Pty. Ltd., partnered with Traditional Owners, the Yindjibarndi people, to develop, own, and operate large-scale renewable energy projects of up to 3 GW capacity in Western Australia’s Pilbara region through the formation of the Yindjibarndi Energy Corporation (YEC). YEC’s initial goal is to have 750 MW of combined wind, solar, and battery storage under construction within the next few years, representing an investment of more than AUD1 billion. Subsequent stages will target an additional 2 GW to 3 GW of combined wind, solar, and battery storage. The expected renewable energy production will surpass the current output of Western Australia’s largest coal-fired power station.

Jonathan Back, ACEN chief strategy officer, said: “We continue to be at the forefront of the global energy transition as we actively establish new partnerships and grow existing relationships in order to deliver reliable and sustainable power to the markets we serve. We are confident that these opportunities will allow us to move ever closer to our ACEN 2030 aspirations and beyond.”