Energy Development Corporation (EDC, the Company) has a portfolio of renewable energy generating assets that rely on indigenous fuels. The Company has 305 MW of geothermal (Palinpinon and Tongonan) and 132 MW hydro (Pantabangan and Masiway) installed capacity that is operating commercially which generates 6,847.4 GWh electricity sales or P24 billion revenue for 2011. The Company still has 825 MW installed geothermal capacity not yet in commercial operations. In addition to high potential geothermal portfolio, EDC is developing an 86 MW wind farm in northern Luzon. Below is the location of EDC’s power generation projects:
Below is EDC corporate structure:
EGC is a holding company for EDC’s geothermal operations. Below are EGC’s subsidiaries:
GCGI was incorporated on June 22, 2009 with primary activities on power generation, transmission, distribution, and other energy related businesses. GCGI currently operates 192.5 MW Palinpinon and 112.5 MW Tongonan 1 geothermal power plants in Negros Oriental and Leyte respectively.
FG Hydro operates the 120 MW Pantabangan and 12 MW Masiway Hydroelectric Power Plants locates in Pantabangan, Nueva Ecija Province, Central Luzon.
EDC Drillco provides drilling services to Lihir gold Limited in Papua New Guinea which contributed P710 million of revenues for the Company in 2011.
EDC revenue performance for 2012 had much improved due to new contract prices agreed mid 2011 and power supply agreements signed in December 2011. Revenues had increase by 21% year-on-year in September 2012 translating to an EPS of 0.38. I project EDC’s EPS to reach 0.49 by the end of 2012.
Based on EDC’s annual report in 2011, the Company expects to put in commercial operations their 130 MW Bacman geothermal power plant by 2012. This is expected to contribute P4.2 billion additional revenues for the year 2013. I project the Company’s EPS for 2013 to at 0.58.
Assuming a 13x PE ratio multiple, EDC’s value should be 6.37 [0.49 x 13] by the end of 2012 and 7.54 [0.59 x 13] by 2013.
Disclaimer: I do not claim to be an expert and nothing I say should be taken as a recommendation to buy or sell.