Vivant Q2 profit falls 27.4% as costs and finance charges rise
Key Takeaways
- •Second-quarter attributable net income fell 27.4% to P490.09 million from a year earlier.
- •Revenue from electricity sales dropped to P2.23 billion in the second quarter from P4.34 billion last year.
- •Power generation costs surged 116% in the quarter to P3.55 billion, adding pressure on earnings.
- •For the first six months, attributable net income declined 21% to P756.8 million even as revenue rose 41% to P7.59 billion.
- •Vivant cited operational challenges, including unplanned plant downtimes, and said it is implementing cost optimization measures.
CEBU-BASED Vivant Corp. reported a 27.4% decline in attributable net income to P490.09 million in the second quarter, as higher operating costs and finance charges weighed on earnings.
In its financial report released on Wednesday, the company said second-quarter revenue from electricity sales fell to P2.23 billion from P4.34 billion a year earlier.
Power generation costs rose 116% to P3.55 billion during the quarter, underscoring the pressure on a business that remains heavily exposed to fuel, maintenance, and plant availability conditions.
Equity in net earnings of associates decreased 29% to P402.17 million, which the company attributed to operational challenges, including unplanned plant downtimes.
Operating expenses increased 18%, while provision for income tax rose to P99.36 million from P57.55 million, further pressuring earnings.
“Vivant recognizes that uncertainties continue to persist. Externally, the ongoing conflict in the Middle East, slower than expected economic growth prospects, and potential changes in industry regulations will continue to shape today’s business environment,” Vivant Corp. Chief Executive Officer Arlo G. Sarmiento said in a statement.
For the first six months, Vivant’s attributable net income fell 21% to P756.8 million, according to the company.
Revenue rose 41% to P7.59 billion, supported by higher energy sales and new revenue contributions from the water segment.
Equity in net earnings of associates declined 14% to P857 million.
The decrease was largely attributed to 20%-owned Therma Visayas, Inc., which swung to a net loss contribution of P382.4 million following unplanned downtime at two generating units in March and May.
Total cost of services jumped 66% to P5.38 billion. Power generation costs alone increased 65% due to higher fuel prices, maintenance costs, and sales volumes.
Expenses climbed 16% to P993.7 million, while other charges rose 32% to P176.3 million.
“Cognizant of existing and prospective headwinds, Vivant continues to implement cost optimization measures to protect our bottomline,” Vivant Corp. Chief Finance Officer and Chief Risk Officer Minuel Carmela N. Franco said.
“Furthermore, the company remains to have a strong balance sheet that enables us to support current operations as well as invest in expansion projects,” she added. — Sheldeen Joy Talavera
