AEV earnings down 9% to P4.6 B

MANILA, Philippines - Lower income contribution from its banking and power generation units dragged the earnings of conglomerate Aboitiz Equity Ventures Inc. (AEV) in the second quarter.

In a regulatory filing, AEV said its consolidated net income dropped nine percent to P4.6 billion in the April to June period.

Adjusting for a P314-million non-recurring income from foreign exchange gains in dollar-denominated loans and placements, AEV’s core profits sank 30 percent to P4.3 billion.

With the latest data, AEV’s first half consolidated net income slipped 20 percent to P9.5 billion from P11.9 billion a year ago. Core net income, which exclude a non-recurring gain of P785 million, eased 26 percent to P8.7 billion in the first semester.

The power business accounted for 74 percent of earnings, followed by the banking, food and land development strategic business units at 17 percent, seven percent and two percent, respectively.

“Despite the decline in our net income, we remain focused on executing our strategy and growing our business,” said AEV president and CEO Erramon Aboitiz.

“We continue to be on the lookout for Public-Private Partnership (PPP) infrastructure projects that make sense to us and support our country’s economic growth,” Aboitiz said, adding that the conglomerate plans to seize growth opportunities among the P900 billion worth of PPP projects that have yet to be auctioned.

Subsidiary Aboitiz Power Corp. recorded a seven-percent drop in income contribution to P6.8 billion from P7.3 billion a year ago.

AboitizPower’s net generation rose four percent to 5,556 gigawatt-hours (gwh) from 5,360 gwh, driven by the uptick in power sales through bilateral contracts while spot market sales posted a double-digit decline.

“We remain committed to growing our portfolio of projects in step with the country’s growth trajectory,” Aboitiz said.

For this year, AboitizPower committed to invest P80 billion in greenfield and brownfield projects across the country, increasing the power capacity by an additional 2,000 megawatts over the next five years.

Union Bank of the Philippines’ income contribution plunged 46 percent to P1.5 billion in the first half from P2.8 billion year-on-year.

Other income slumped 57 percent to P3.7 billion in the absence of exceptionally higher trading gains. It offset the 29-percent growth in net interest income to P5.2 billion amid robust growth in earning assets.

Non-listed subsidiary Pilmico Foods Corp. recorded a three-percent improvement in income contribution to P647.8 million from P630.7 million due to higher sales volume.

In May, Pilmico International Pte. Ltd. acquired Vin Hoan 1 Feed JSC, one of the largest aqua feed producers in Vietnam, for $28 million.

“The ASEAN markets will provide a growth platform for our core businesses, especially in food. We are excited to be expanding Pilmico’s businesses outside the Philippines, where we can leverage our experience in the flour, feeds, and farms business,” Aboitiz said.

Property unit AboitizLand Inc. recorded a 63-percent surge in net income contribution to P181.3 million from P111.1 million a year ago as revenues more than doubled to P1.3 billion due to the consolidation of LiMA Land.

For its new businesses, AEV’s subsidiary Aboitiz Land Inc. and Ayala Corp., through joint venture unit Team Orion, topped the recent bidding for the P35.4-billion Cavite-Laguna Expressway (Calax).

Team Orion submitted a concession payment of P11.659 billion for the PPP project and is currently awaiting the notice of award from the Department of Public Works and Highways.

“We are optimistic that the issue on the Calax bidding will soon be resolved, and that the integrity of the public bidding process will be respected,” Aboitiz said.