February 19, 2014

FGEN eyes early commissioning of San Gabriel plant

The Philippine Star reported today that the First Gen Corp (FGEN, Buy) is eyeing commercial operations of its 414 MW San Gabriel power facility by end-2015 or about a quarter earlier than the March 2016 original target. The company noted the smooth proceeding of its site preparation and the manufacturing of the plant turbines.

Our Take: We view this as yet another positive newsflow on FGEN which in the past has disappointed investors due to execution concerns. If FGEN can indeed accelerate the operation of the new plant, then this will provide a boost to investor sentiment.

The accelerated commissioning will also hasten the expansion of the San Gabriel plant by 800MW and enhances the synergy with the nearby Sta Rita and Sn. Lorenzo plants, leading to better operating efficiencies and overall profitability. – WealthSec