AEV earnings soar 77% in 2021

MANILA, Philippines — Net earnings of listed Aboitiz Equity Ventures Inc. (AEV) surged by 77 percent last year on the back of the robust performance of its business units amid an improving economy.

In a disclosure to the Philippine Stock Exchange yesterday, AEV said its full year profit reached P27.3 billion last year versus P15.4 billion the previous year.

This included non-recurring gains of P527 million from the revaluation of dollar-denominated assets compared to the P477 million in non-recurring losses recorded in 2020.

Sans the one-off gains, AEV’s core net income still jumped by 68 percent to P26.8 billion.

“At the end of 2021, the Aboitiz Group’s performance trajectory continues to substantially improve, posting steadily rising figures. Our investments in digital transformation and innovation, matched by a strong culture of agility and resilience have paid off handsomely as we powered through the pandemic with strong performance indicators,” AEV president and CEO Sabin Aboitiz said in a statement.

Of its business units, power accounted for 57 percent of the total income, followed by financial services at 23 percent. Real estate, food, and infrastructure business units contributed nine percent, seven percent, and five percent, respectively.

Income contribution of Aboitiz Power Corp. soared by 66 percent from P9.7 billion to P16 billion.

It attributed the income rise to the commissioning revenue from Unit 1 of GNPower Dinginin Ltd. Co. (GNPD), higher water inflow from its hydro plants, higher availability of Therma Luzon Inc. (TLI), Therma South Inc. (TSI) and Therma Visayas Inc. (TVI) facilities, and higher wholesale electricity spot market (WESM) dispatch in compliance with the must-offer rule.

“The new capacity from GNPD Unit 1 not only contributed to AboitizPower’s better financial performance, but also delivered the much-needed energy supply as economic activities gradually increased in 2021,” AboitizPower president and CEO Emmanuel Rubio said.

In addition, AboitizPower was able to claim liquidated damages for the delay in the construction of GNPD Units 1 and 2, and received the final payment for business interruption claims resulting from GNPower Mariveles Energy Center Ltd. Co. (GMEC) and AP Renewables Inc. (APRI) outages in previous years.

In terms of income contribution, AboitizPower’s generation and retail electricity supply businesses accounted for 85 percent of the total, while the distribution business cornered 15 percent.

The banking and financial services business under Union Bank of the Philippines contributed P6.4 billion to AEV, up nine percent from P5.9 billion.

The banking unit saw net interest income grow four percent due to the sustained increase in net interest margins, while non-interest income rose 14 percent due to higher fees, service charges, foreign exchange income and trading gains.

It also recorded lower loan loss provisions – down 31 percent – to the stabilization of credit risk compared to 2020. Its non-performing loans (NPL) ratio improved to five percent as of end-December last year from 5.1 percent as of year-end 2020.

AEV’s non-listed food subsidiaries Pilmico Foods Corp., Pilmico Animal Nutrition Corp., and Pilmico International Pte. Ltd. contributed P2 billion, a 10 percent decline from P2.2 billion in 2020.

The agribusiness segment, which consists of the regional animal nutrition businesses, reported a net income of P1.3 billion, 44 percent lower than the P2.3 billion in 2020 due to a decline in margins resulting from the sharp increase in raw material costs.

Net income of the food and nutrition segment, which consists of the flour, farms, meats, and trading divisions, surged 365 percent to P934 million primarily due to increased income from the farm business as pork prices increased due to lack of supply in the market during 2021, supported by incremental income coming from commodity trading.

AEV’s non-listed real estate businesses, comprising of Aboitiz Land Inc. and its subsidiaries, reported a consolidated net income of P2.6 billion, 658 percent higher than the P338 million recorded in 2020.

Its revenues rose 47 percent due to increased construction activities across most of its projects and increased sales performance, with spot payments in its high value properties.

The infrastructure group, Republic Cement & Building Materials Inc., reported a 164 percent jump in income contribution to P1.6 billion on the back of stronger market demand from the residential and infrastructure segments, as well as increased overall efficiency resulting from capital investments.

It also benefitted from a one-time gain brought about by the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which reduced its deferred tax liabilities.