Napocor back in the red with P8.32-B loss in H1
The Philippine Star 11/29/2006
State-owned National Power Corp. (Napocor) has reverted to a net loss of P8.32 billion in the first six months of 2006 due to huge foreign exchange and interest expenses, official documents said.
The amount, it was learned, did not yet include the financial losses as a result of its trades at the country’s wholesale electricity spot market (WESM).
The loss was a reversal from the P15.46 billion income registered in the same period in 2005.
Based on the documents, Napocor’s interest expense payments for the first half of the year jumped by P2.13 billion. "The increase in interest expenses was due to higher volume of loans," the report said.
Napocor, through the Power Sector Assets and Liabilities Management Corp. (PSALM), has been borrowing money to partly fund its huge principal and interest payments.
Since last year, PSALM, which handles the finances of Napocor as mandated under the Electric Power Industry Reform Act (EPIRA), has borrowed $700 million to refinance the power firm’s maturing obligations.
For the six-month period, forex losses went up to P9.86 billion due to the depreciation of the peso against the dollar and other foreign currencies as against a P13.982 billion gain in the same period in 2005.
In 2005, Napocor posted P62.756 billion net earnings due to forex gains of P64.756 billion.
Other factors that contributed to Napocor’s favorable income performance last year included the rate adjustment approved by the Energy Regulation Commission and its P200-billion outstanding debts absorbed by the National Government.
In the early part of its trading at the WESM, Napocor had been claiming to have incurred losses of more than P1 billion.
If this trend continues, it is estimated that Napocor may end the year 2006 with a net loss of P48.87 billion for 2006.
Noli Kabayan De Castro
State-owned National Power Corp. (Napocor) has reverted to a net loss of P8.32 billion in the first six months of 2006 due to huge foreign exchange and interest expenses, official documents said.
The amount, it was learned, did not yet include the financial losses as a result of its trades at the country’s wholesale electricity spot market (WESM).
The loss was a reversal from the P15.46 billion income registered in the same period in 2005.
Based on the documents, Napocor’s interest expense payments for the first half of the year jumped by P2.13 billion. "The increase in interest expenses was due to higher volume of loans," the report said.
Napocor, through the Power Sector Assets and Liabilities Management Corp. (PSALM), has been borrowing money to partly fund its huge principal and interest payments.
Since last year, PSALM, which handles the finances of Napocor as mandated under the Electric Power Industry Reform Act (EPIRA), has borrowed $700 million to refinance the power firm’s maturing obligations.
For the six-month period, forex losses went up to P9.86 billion due to the depreciation of the peso against the dollar and other foreign currencies as against a P13.982 billion gain in the same period in 2005.
In 2005, Napocor posted P62.756 billion net earnings due to forex gains of P64.756 billion.
Other factors that contributed to Napocor’s favorable income performance last year included the rate adjustment approved by the Energy Regulation Commission and its P200-billion outstanding debts absorbed by the National Government.
In the early part of its trading at the WESM, Napocor had been claiming to have incurred losses of more than P1 billion.
If this trend continues, it is estimated that Napocor may end the year 2006 with a net loss of P48.87 billion for 2006.
Noli Kabayan De Castro
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