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Power Companies Sink Most in Philippines as Storm Damages Plants

Nov. 15 (Bloomberg) -- First Gen Corp. and its unit Energy Development Corp. fell the most in the Philippine benchmark stock index this week after Typhoon Haiyan damaged power plants and wrecked transmission lines.

First Gen has dropped 11 percent this week, heading for its biggest loss since June 2009. The stock declined 1.4 percent to 14.16 pesos at 2:05 p.m. in Manila today, poised for its lowest close in almost 18 months. Energy Development, the largest Philippine generator of geothermal power, slid 10 percent this week, the most since February 2012. The Philippine Stock Exchange Index has risen 0.3 percent.

The storm damaged Energy Development’s four major plants in its Leyte geothermal production field, the company said in a statement on Nov. 11. The field accounts for 56 percent of the company’s overall generating capacity, according to its web site. The National Grid Corp. of the Philippines will need six weeks to restore transmission lines damaged by Haiyan, BusinessMirror reported today.

Energy Development “potentially lost a source of income,” said Rico Gomez, head of the trust trading division at Manila-based Rizal Commercial Banking Corp. “Most people will wait” to see the damage repaired before they consider buying the shares, he said.

Energy Development contributed $758.81 million to First Gen’s $1.40 billion revenue from power generation in 2012, according to company data compiled by Bloomberg. Calls to First Gen President Giles Puno’s office were unanswered. Energy Development will have a clearer picture of the damage next week, said Erudito Recio, investor relations manager.

Storm Destruction

Leyte province bore the brunt of the storm, which slammed into the central Philippines on Nov. 8. At least 4,460 people were killed and 243,600 houses destroyed, according to the United Nations. Much of the damage was concentrated in and around Tacloban city, the capital of the province, while roads have been washed away or blocked by debris.

Cooling towers at Energy Development’s Malitbog, Tongonan and Mahanagdong power plants sustained damage, while the Upper Mahiao power plant may be restored “quickly,” according to the company’s statement.

The four plants have a 650.9 megawatt combined capacity, accounting for 93 percent of the Leyte field’s installed generating capacity. The field contributed 7.58 billion pesos ($173 million) in sales in the first half, or 56 percent of the company’s 13.43 billion peso sales in the six-month period, according to the company’s web site.

Transmission Lines

Haiyan destroyed 248 electricity towers and 318 poles, while seven substations were damaged as of Nov. 12, the BusinessMirror said.

“Even if the damage is minor and Energy Development gets the facility on-line, it can’t deliver electricity if the transmission wires aren’t restored,” said George Ching, analyst at COL Financial Group Inc. in Manila.

Aboitiz Power Corp., the nation’s largest power generator by market value, is little changed this week. The company hasn’t reported any damage to its plants.

First Gen has lost 38 percent in the past 12 months, making it the second-worst performer on the Philippine Stock Exchange Index, which rallied 18 percent. The company said last yesterday third-quarter profit fell 28 percent.

First Gen, directly and through subsidiaries, owns about half of Energy Development, which has slumped 24 percent in the same period. The company suspended in March its 110-megawatt Bacman power plant in Albay province, weeks after it was restarted following more than a year of repairs. Its net income declined 20 percent in the third quarter.

The storm damage spurred Metropolitan Bank & Trust Co. to reduce its stake in Energy Development.

“Our holdings were small to begin with but we reduced it a bit because of the uncertainty on revenue brought about by the typhoon,” said Allan Yu, chief investment officer at Metropolitan Bank & Trust Co., the third-largest Philippine money manager. “The company has had a string of bad luck.”

To contact the reporter on this story: Ian Sayson in Manila at

To contact the editor responsible for this story: Michael Patterson at

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