EDC 2014 SR (UPDATED)

EDC 2014 Performance Report
EDC has the country’s first combined solarwind
farms in Burgos Ilocos Norte.
Our 4.1MW Solar
Power Project
in Burgos is expected to
generate
5.7GWh annually
As we work to expand our wind
and solar portfolio under the
government’s Feed-in Tariff system,
we are concurrently expanding our
geothermal business. For 2015, we
expect to issue the notice to proceed
on a new modest 30MW power plant
in Bacman. We continue to explore
and develop expansion areas in our
existing geothermal sites.
Overseas, we are very excited to begin
our first major international drilling
campaign in Chile this October 2015
with a planned two to three wells. In
preparation, we have begun drilling
the top holes or the first 50 meters of
the wells in our Mariposa concession
in Chile. The installation of the anchor
casings in the top hole sections of
the well will reduce the time it will
take to drill the full three-kilometer
wells, which is critical as we only have
five months of the Chilean summer
starting October 2015.
In Indonesia, we are waiting for
the Ministry of Energy and Mineral
Resources to tender out the Graho
Nyabu concession in Sumatra. Recall
that we submitted to the Ministry the
results of our preliminary survey in
2013, which will be used as the basis
for the tender.
4
WORKING TO WIN THE CONFIDENCE OF THE
CAPITAL MARKETS
The fourth building block is our
improving reputation with our
investors, both on the buy and sell
sides as well as the debt capital
markets.
In simple fact, the delays caused by
the technical issues in rehabilitating
and returning Bacman to service
dampened our investors’ confidence
in our ability to execute. In 2013, we
commissioned a third-party survey
of both the buy and sell sides of
our listed stock. When asked about
EDC, investors would then cite
“Bacman’s delay” and “poor project
execution”, and recall the lack of
detailed explanations or resolution
plans. While the comments made
may have been harsh, the views of
the market should always be taken at
face value. It was understandable that
we, the management of EDC, were
questioned.
And indeed in 2014, as we steadily
delivered all of the projects we
committed to, investors’ confidence
dramatically improved. First came
the restoration of the Typhoon
Yolanda-damaged plants in Leyte
several months ahead of schedule,
then the units of Bacman, then
Nasulo, then Burgos Wind. In the
2014 year-end investor perception
survey, the top two recall items are
“renewable energy” and “growth
prospects” and it seems like Bacman
has been relegated as an issue of
the past. EDC investors now talk of
the “successful execution of outlined
plans particularly in the Bacman
rehabilitation”, “managing recovery
efforts through extraneous events (like
Typhoon Yolanda)”, “strengthening the
depth and capabilities of executives
and operating managers”, and
“showcasing significant improvements
in investor communications”.
Our stock
closed at
₱8.2 per share,
as of end
December 2014
Investors now recall “successful execution of outlined plans particularly in the Bacman rehabilitation”,
“managing recovery efforts through extraneous events (like Typhoon Yolanda)”, “strengthening the depth
and capabilities of executives and operating managers”, and “showcasing significant improvements in
“investor communications”.
”
22
This page contains the following GRI indicator(s):
G4-1, G4-PR5