Napocor sees another profit year as peso strengthens
The Philippine Star 10/23/2006
National Power Corp. (Napocor) is highly optimistic it will continue to register profits this year, helped by the strengthening of the peso.
Napocor president Cyril C. del Callar said after a recent company planning session that they intend to sustain the financial gains last year into this year and the suceeding years.
"Napocor is becoming a profit center, not cost-centric," Del Callar said. However, he refused to cite exact amounts until the final figures are released.
But he printed out demand for power was very strong in the third quarter as manufacturers went full blast to meet December demand, both for exports and domestic Christmas buying. Traditionally, the fourth quarter is consumer spending for the Christmas season, with a big bulk coming from the province.
Napocor has total outstanding loans of $7 billion (roughly P372 billion), from its creditors including the Asian Development Bank (ADB), the World Bank, the Japan Bank for International Cooperation (JBIC) and other commercial creditors.
Majority of the debts has been assumed by the state-run Power Sector Assets and Liabilities Management Corp. (PSALM).
Del Callar said they expect more foreign exchange gains with the strengthening of the peso. Government expects Napocor to register losses or become loss-neutral based on the exchange rate assumption of P52 to the dollar.
The peso closed at 50.10 last Friday, although it had challenged the 49 level several times last week.
As a rule of thumb, every peso gain against the dollar is equivalent to about P15 billion in forex gain or loss. "So we could just imagine the gains if the peso continues to appreciate."
Also expected to contribute to better earnings this year is the use of biodiesel and other biofuels.
Napocor has started testing the use biofuels on all its power plants.
"I have ordered testing of all kinds of alternative sources of fuel for our power plants. It looks good based on the tests of jathropa done by Department of Science and Technology (DOST)," the Napocor official added.
National Power Corp. (Napocor) is highly optimistic it will continue to register profits this year, helped by the strengthening of the peso.
Napocor president Cyril C. del Callar said after a recent company planning session that they intend to sustain the financial gains last year into this year and the suceeding years.
"Napocor is becoming a profit center, not cost-centric," Del Callar said. However, he refused to cite exact amounts until the final figures are released.
But he printed out demand for power was very strong in the third quarter as manufacturers went full blast to meet December demand, both for exports and domestic Christmas buying. Traditionally, the fourth quarter is consumer spending for the Christmas season, with a big bulk coming from the province.
Napocor has total outstanding loans of $7 billion (roughly P372 billion), from its creditors including the Asian Development Bank (ADB), the World Bank, the Japan Bank for International Cooperation (JBIC) and other commercial creditors.
Majority of the debts has been assumed by the state-run Power Sector Assets and Liabilities Management Corp. (PSALM).
Del Callar said they expect more foreign exchange gains with the strengthening of the peso. Government expects Napocor to register losses or become loss-neutral based on the exchange rate assumption of P52 to the dollar.
The peso closed at 50.10 last Friday, although it had challenged the 49 level several times last week.
As a rule of thumb, every peso gain against the dollar is equivalent to about P15 billion in forex gain or loss. "So we could just imagine the gains if the peso continues to appreciate."
Also expected to contribute to better earnings this year is the use of biodiesel and other biofuels.
Napocor has started testing the use biofuels on all its power plants.
"I have ordered testing of all kinds of alternative sources of fuel for our power plants. It looks good based on the tests of jathropa done by Department of Science and Technology (DOST)," the Napocor official added.
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