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Coal eroding further investors’ appetite for Aboitiz Power

Aboitiz Power (AP) controls a coal-fired generating capacity of around 2,745.27 MW.

As previously reported by Bloomberg, coal prices have been surging lately because of pent-up demand globally. The increasing coal prices may increase the fuel cost of the huge coal-fired generating capacity of AP. Increased cost could-affect is bottom-line. The ability to pass-on the fuel costs to consumers may be limited by regulators as consumers are already bearing the increasing costs of basic commodities.

Another factor that could turned-off investors from AP is that AP may still expand its already burgeoning indebtedness to fund its share of the construction costs of its latest coal-fired power plant GN Power Dinginin. The cost of the additional borrowing could further erode the bottomline.

Lately AP’s share price rallied at the back of some huge investors taking position, but it seems the rally is fizzling.

AP could hit back to its 52-week low of 20.50. It doesn’t help those huge investors are getting scared to put their money on companies with huge carbon footprint. AP controlling some 3,404.62 MW of fossil-fuel generating capacity is one of those heavy carbon emitters. In fairness, AP controls 1,248.27 MW of renewal energy capacity, the biggest in the country.

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