AEV earnings down 54% to P3.9 billion in Q1

MANILA, Philippines — Aboitiz Equity Ventures Inc. (AEV) halved its net income in, the first three months of the year mainly pulled down by its power and banking units.

In a disclosure to the Philippine Stock Exchange, AEV said its first quarter consolidated net income declined by 54 percent  to P3.9 billion this year.

The company attributed the decline to extraordinary items such as Typhoon Odette, advanced outage. It also had non-recurring gains from liquidated damages from the delay in the construction of GNPower Dinginin Ltd. Co. (GNPD), business interruption claims for the GNPower Mariveles Energy Center Ltd. Co. (GMEC) plant outages, and extraordinary trading gains last year.

Without these one-off items, AEV said its first quarter net income would have been lower by only four percent.

And as part of its transformation strategy, AEV’s ownership in Aboitiz Power Corp. declined from 77 percent to 52 percent effective end-2021, because of its strategic partnership with Japanese JERA Co. Inc., thereby reducing its share in earnings as reflected in the first quarter results.

Of its strategic business units, power accounted for 41 percent of the total income contributions followed by financial services at 36 percent. Income contributions from food, real estate, and infrastructure SBUs were at 14 percent, four percent, and four percent, respectively.

AboitizPower saw its income contribution to AEV drop by 69 percent from P4.9 billion to P1.5 billion. On a stand-alone basis, its net income slipped by 53 percent to P2.9 billion.

Income contribution from the generation and retail electricity supply businesses – which accounted for 81 percent of the total – reached P3.2 billion or down by 47 percent.

Meanwhile, the distribution business recorded an income share of P742 million, a 32 percent decrease year-on-year. It accounted for 19 percent of the total.

“We expect electricity demand to grow in the coming months due to the resumption of economic activities of many Filipinos, and as this leads to power reserves in the Luzon and Visayas grids to be squeezed thinner, we at AboitizPower are doing the best we can to prepare for this situation,” AboitizPower president and CEO Emmanuel Rubio said.

“It is our intention to keep our generation plants running at an optimal capacity to continuously serve the energy needs of our customers, and for our distribution utility in Cebu to assist in demand-side management through the Interruptible Load Program,” he said.

Union Bank of the Philippines saw a 44 percent drop in income contribution from P2.4 billion to P1.3 billion. On a stand-alone basis, UnionBank and its subsidiaries recorded a 45 percent decline in net income to P2.6 billion.

The bank attributed this to extraordinary trading gains recorded in the same period last year.

AEV’s non-listed food subsidiaries – composed of Pilmico Foods Corp., Pilmico Animal Nutrition Corp., and Pilmico International Pte. Ltd – contributed P502 million to AEV, which was 31 percent lower than last year’s P724 million.

Republic Cement & Building Materials Inc. incurred a net loss of  P18 million versus the P874 million net profit last year due to lower market demand for cement due to the increase in prices of steel and other construction materials.

Only AEV’s non-listed real estate businesses, consisting of Aboitiz Land Inc. and its subsidiaries and Lima Land Inc., reported higher consolidated net income at P390 million, up 48 percent.

“As new global disruptions emerge with the continuing conflict in Ukraine, we are prepared to deal with uncertainties through our agile and resilient mechanisms and mindsets that were deeply embedded in our organization long before the pandemic,” said AEV president and CEO Sabin Aboitiz.