For the first half of the year, First Philippine Holdings Corporation (First Holdings) registered an unaudited net loss attributable to equity holders of the parent amounting to P395 million, in contrast to a P2.7 billion net income recorded during the same period in 2007.

The net loss was primarily due to a drop in earnings from First Holdings’ subsidiaries in the power generation and toll roads businesses. The other driving factors that contributed to the net loss were the higher finance and interest charges incurred from new loans due to the acquisition of the controlling stake in geothermal player EDC, as well as the increase in equity in power affiliate, Manila Electric Company (Meralco).

Company President, Elpidio L. Ibañez said “Our subsidiaries’ and affiliates’ performance reflect the current economic turbulence. Although we see this condition as temporary, it will continue to depress our recurring consolidated earnings in the short term.”

Nevertheless, consolidated revenues for the first half of 2008 amounted to P41.6 billion, higher by 36% compared to 2007. The increase was primarily driven by the revenues of newly-acquired EDC amounting to P8.8 billion, as well as higher fuel and capacity charges for First Gen Corporation’s Santa Rita and San Lorenzo power plants.

Consolidated costs and expenses of P29.5 billion were higher by 32% compared to 2007.  The increase was mainly due to EDC-related power plant operations and maintenance expenses, higher fuel cost, as well as an increase in general and administrative expenses pertaining to EDC.  Foreign exchange loss reached P4.9 billion during the period, a reversal of the P372 million foreign exchange gain recorded in 2007. Finance charges of P5.2 billion were significantly higher than last year’s P2.7 billion on account of new loans made by the Parent as well as its subsidiaries in Power Generation.

On August 7, 2008, First Holdings disclosed that it and parent company Benpres Holdings Corporation had entered into an agreement with Metro Pacific Investments Corporation for the latter to acquire First Philippine Infrastructure Inc. (FPII), the publicly-listed vehicle of the Lopez Group in the toll roads business.  FPII owns 67.1% of Manila North Tollways Corporation and 46% of Tollways Management Corporation. The agreed purchase price is P12.26 billion, of which First Holdings will receive P6.2 billion.

First Holdings manufacturing subsidiary, First Philec Corporation (First Philec), recently inaugurated its P3.4 billion silicon wafer-slicing plant at the First Philippine Industrial Park in Batangas. The company, First Philec Solar Corporation (FPSC) is an 80-20 joint venture of First Philec and SunPower Manufacturing, Ltd.

First Holdings’ investments in property development performed well during the first half of 2008, led by Rockwell Land Corporation which has already sold 97 percent of its “One Rockwell” condominium units.   Other Rockwell projects now in progress are the P12-billion, five-tower residential project along C-5 in Pasig City called “The Grove”, as well as its BPO center within the Meralco compound.

First Holdings’ construction subsidiary, First Balfour, is also making strong headway.  Recently, the joint venture of First Balfour and D.M. Consunji won the LRT-1 North Extension Project.  The project will connect the existing LRT-1 to MRT-3 by constructing a new elevated viaduct from Monumento Station of LRT Line 1 to North Avenue Station of Line 3. The target completion of this project is in May 2010, and will be in three contract packages worth P3.6 billion.

Last July, First Holdings paid out the first cash dividends to its Series B preferred shareholders. The dividends amounted to P2.23 share, or a total of P95.9 million. First Holdings listed these preferred shares in the Philippine Stock Exchange last April 2008.

Click here to view the SEC 17-Q.