Aboitiz Power (AP) expects an oversupply in Mindanao in the next five years as more power plants come on line in the region. 23% of AP’s Gwh sales come from Mindanao, and a power glut will cause rates to drop and AP’s earnings to partially decline. Aside from AP, San Miguel (SMC) has the upcoming Malita power plant and Energy Development Corp. (EDC) has geothermal power plants in Mindanao comprising 10% of its Gwh sales. AP is the most affected from the power & utilities stocks we cover from the decline in power rates. That is why it is seeking for opportunities in Indonesia, Luzon and the Visayas as well.
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