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Energy firms to see moderate Q2 growth — analysts

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ENERGY COMPANIES are expected to see moderate growth in the second quarter, driven by the increase in domestic demand and investments in renewable energy, according to analysts.

The economic recovery is seen to “stimulate industrial and commercial energy consumption, further supporting revenue growth,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message last week.

“Looking ahead, the energy sector is poised to continue its growth trajectory, particularly as companies adapt to the evolving landscape and embrace renewable energy solutions,” Seedbox Securities, Inc. Equity Trader Jayniel Carl S. Manuel said in a phone message.

Mr. Manuel said that the sector’s shift towards renewable energy “offers a promising path for sustainable growth and resilience” amid challenges brought by economic pressures such as interest rates and inflation.

Many listed energy companies posted favorable income results for the first quarter, citing gains from their energy sales and power generation businesses.

Those that reported lower earnings attributed decline to lower power prices.

Manila Electric Co. saw its attributable net income increase by nearly 19% to P9.6 billion from P8.07 billion last year, driven by energy sales and growth in other business segments.

Ayala-led ACEN Corp. reported a 34% increase in its first-quarter attributable net income to P2.72 billion from P2.03 billion previously, driven by contributions from its newly operational solar and wind farms.

Aboitiz Power Corp. posted an attributable net income of P7.86 billion, 4.4% higher than last year’s P7.53 billion, on the back of higher generation portfolio margins.

Meanwhile, Lopez-led First Gen Corp.’s attributable net income declined by 11.7% to $78.82 million from $89.23 million, mainly driven by weaker power prices and higher expenses.

Semirara Mining and Power Corp. recorded a 28% decline in its consolidated net income to P6.54 billion from P9.03 billion due to weak coal and power selling price. 

Mr. Limlingan said that energy companies may face challenges from high inflation and elevated interest rates, coupled with peso depreciation, which impact companies with US dollar-denominated debts or those reliant on imported materials.

He said, however, that companies with diversified energy portfolios and significant investments in renewable energy “are better equipped to leverage regulatory incentives and sustain growth.”

“Basically, energy companies are navigating a dynamic and challenging environment, but those that successfully integrate renewable energy and innovative technologies are likely to thrive in the coming years,” Mr. Manuel said. — Sheldeen Joy Talavera

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