First Philippine Holdings Corporation (FPHC) earned its highest revenues and net income in its 46-year history. Its revenues hit an all-time high of P59.6 billion, 12% higher than last year’s P53.3 billion, while its net income attributable to equity holders of the parent company was P8.7 billion, 78% higher than P4.9 billion last year.

The increase was brought about by two non-recurring events. The first was the P2.7 billion gain on dilution in First Gen Corporation or First Gen, its power generation subsidiary, after its successful initial public offering in February last year. The other was the favorable Supreme Court decision on the Manila Electric Company or Meralco tariff unbundling case. Meralco is FPHC’s power distribution associate.

Without these two events, net income would have been P4.2 billion, 14% lower than last year.

FPHC’s subsidiaries and associates continued to perform well. First Gen continues to deliver 1,839 megawatts or 12% of power to the nation. First Gen registered a 6% increase in its net income from $ 87 million to $ 92 million. In November, First Gen won the Power Sector Assets & Liabilities Management auction of the Pantabangan-Masiway hydroelectric power plant complex. Final resolutions of the disputes between First Gas and Siemens and First Gas and its gas sellers were also achieved.

Meralco was the year’s most improved performer. From a P350 million net loss in 2005, it registered a major turnaround to P13.7 billion net income attributable to equity holders of the parent company in 2006. Aside from the favorable Supreme Court decision, Meralco also had a successful P12 billion fixed and floating corporate notes issuance, the largest to date in Philippine history. The proceeds of this will be used to refinance secured loan obligations and fund working capital requirements. Meralco also brought down its systems loss to 10.10%, the lowest in 25 years, despite the devastation of Typhoon Milenyo, the strongest typhoon to hit the country in recent years.

FPHC’s tollways investee, through FPIDC, the Manila North Tollways Corporation (MNTC) performed well, registering a 12% increase in revenues. This is mainly due to an increase in average daily traffic. Net income increased by 10% from P1.5 billion to P1.7 billion. During the year, the anti-overloading campaign was strictly implemented to maintain the good driving conditions of the road. MNTC also launched a P5.5 billion, seven-year fixed rate corporate note. This note was rated ‘PRS Aaa’ by PhilRatings.

Another associate, Rockwell Land Corporation (Rockwell), continued to lead the condominium living market with robust condominium unit sales. By yearend, its 6th residential development, the Joya Lofts & Towers, was 97% sold. Its latest offering, Number One Rockwell, already started construction this year. During its pre-selling period last year, it was already 54% sold.

FPHC is also preparing to develop its Manufacturing sector into a major business segment. First Philec established First Philippine Power Systems, a manufacturer of dry type transformers to serve American Power Conversion, the leading manufacturer of uninterruptible power supply units in the world. First Sumiden Circuits, Inc., the joint venture company with Sumitomo Corporation and Sumitomo Electric of Japan, won the Philippine Quality Award Level 3 Mastery in Quality Management during the 9th cycle.

FPHC declared a P1/share cash dividend to all stockholders of record as of April 27, 2007. The dividend will be paid on May 10, 2007. Last year, FPHC paid P2/share cash dividends.

Earlier this year, FPHC launched its P5 billion Fixed Rate Commercial Note (FRCN). Last March 28, FPHC held its note signing at the Tower Club in Makati with ING Bank as the Sole Bookrunner and Lead Manager. FPHC has already drawn the amount of the FRCN. The proceeds will be used for general corporate purposes, including capital expenditures and acquisitions.