AEV posts P21-B profit in 2013

MANILA, Philippines - The weakness in the power business dragged the performance of conglomerate Aboitiz Equity Ventures Inc. (AEV) last year.

In a regulatory filing, AEV said its consolidated net income slipped 12 percent to P21 billion from P23.97 billion in 2012.

Last year, the revaluation of the consolidated dollar-denominated liabilities and placements resulted in a non-recurring loss of P1.43 billion while the company recorded a one-time net gain of P161.4 million from the power unit’s acquisition and another P1.29 billion from the sale of City Savings Bank Inc.

“Adjusting for these one-offs, AEV’s core net income amounted to P21 billion, reflecting a decrease of 10 percent versus (the previous) year,” the holding firm said.

“The dip in our full-year net income was largely expected. We are confident that we remain on track with our various strategies to grow our power business and provide better power solutions in the Philippines,” said AEV president and CEO Erramon Aboitiz.

For the entire 2013, the power business accounted for 72 percent of income, followed by the banking, food and real estate strategic business units at 21 percent, six percent and one percent, respectively.

Major income contributor Aboitiz Power Corp. reported a 33-percent slump in earnings to P11.7 billion.

“The decline was mainly attributable to the lower margins registered by the Pagbilao plant, the higher fuel cost brought about by the implementation of the geothermal resource supply contract for the Tiwi-Makban plants, and lower ancillary sales by the Magat plant,” AEV said.

AboitizPower’s attributable net generation last year rose three percent to 10,949 gigawatt-hours (gwh) from 10,660 gwh due to the 37-percent increase in spot sales to 1,914 gwh from 1,398 gwh while sales through bilateral contracts dropped two percent to 9,035 gwh from 9,261 gwh.

The power distribution group’s earnings rose 14 percent to P2.5 billion from P2.2 billion “due to the improvement in volumes and margins,” AEV said. Total attributable electricity AEV

sales increased four percent to 4,076 gwh from 3,934 gwh.

For its part, income contribution of Union Bank of the Philippines hit P4.1 billion, up seven percent from P3.9 billion from a year ago.

“The record performance is attributed to the 19-percent increase in net revenue, in view of marked improvements in net interest income and other income,” AEV said.

AEV’s food unit Pilmico Foods Corp. accounted for P1.3 billion in profits, down three percent from last year due to weaker performance of the feeds division on the back of high input costs.

Real estate unit Aboitiz Land Inc. (AboitizLand) posted a consolidated net income contribution of P273.5  million in 2013. In November, AEV folded AboitizLand into the group.

“Total revenues stood at P1.8 billion, the bulk of which came from the residential segment at 57 percent of total, followed by the industrial segment at 40 percent,” AEV said.

The listed firm earlier announced its plan to spend P88 billion this year, up almost 50 percent from P59 billion in 2013. The bulk of expenditures, amounting to P78 billion, will be implemented by the power business as it continues to explore and build new power plants amid the tightening supply-demand situation.