Energy Development Slumps Most in Four Years on Typhoon Shutdown

Energy Development Corp. (EDC), the largest Philippine geothermal power generator, fell the most in more than four years on concern earnings will decline after the company said its typhoon-damaged plants are inoperable.

The shares tumbled 12 percent to 4.58 pesos at the close in Manila, the sharpest loss since April 13, 2009. They were the biggest decliners in the benchmark Philippine Stock Exchange Index (PCOMP), which dropped 1.2 percent. First Gen Corp. (FGEN), parent of the company, slid 7.2 percent to 12.90 pesos, capping a nine-day, 20 percent slump.

“Investors are concerned over the short-term impact on income, considering more than half of the company’s capacity is down and it’s uncertain when it will be back on line,” said Aaron Salvador, Manila-based analyst at Macquarie Group Ltd. Salvador has a neutral rating on Energy Development shares with a 12-month price forecast of 6.70 pesos.

Energy Development said today that none of the four major plants in its Leyte field that were damaged by Typhoon Haiyan are operational. The company is invoking force majeure under a purchase contract with National Power Corp.

The Leyte field accounts for 56 percent of the company’s overall generating capacity, according to its website. It contributed 7.58 billion pesos ($174 million) of the company’s first-half revenue of 13.43 billion pesos, data show.

Energy Development is “exerting all best efforts to return all the power plants back to service at the soonest possible time,” it wrote in a stock exchange filing today. The four plants have 650.9 megawatts combined capacity, accounting for 93 percent of the Leyte field’s capability.

“Over the long term, it remains a good venture, but expect negative news flow in the next couple of months,” Salvador said.

The stock has 11 buy and two hold ratings, with an average 12-month price forecast of 7.09 pesos, according to a Bloomberg survey of analysts.

To contact the reporter on this story: Ian Sayson in Manila at isayson@bloomberg.net

To contact the editor responsible for this story: Michael Patterson at mpatterson10@bloomberg.net

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