Aboitiz Power: Strong core earnings but 4Q net loss on one-offs
From AB Capital's The Opening Bell: Three Moves
Event
AboitizPower reported 4Q25 core income of P10.0 billion (+54% YoY), bringing FY25 core income to P33.1 billion (-2% YoY), ahead of expectations at 104% of AB Capital and 107% of consensus forecasts. However, reported net income swung to a P3.9 billion loss in 4Q25 due to P13.9 billion in non-recurring losses, mainly from the impairment of GNPower Mariveles Energy Center.
View
In our view, results highlight improving earnings visibility in 2H25 as higher contracted capacity and better plant availability helped offset early-year pressures from weaker spot prices and outages. While 4Q generation and RES volumes declined 9% sequentially following the typically stronger 3Q, EBITDA jumped 13%. We think this likely reflects higher share of contracted capacity alongside contributions from new assets.
Catalyst
Key drivers include continued contracting of capacity, which should further reduce exposure to spot market volatility, and the rollout of incremental capacity from hydro, solar, and BESS projects expected in FY26.
Action
We maintain our Outperform rating with a P54/sh target price and continue to view AP as our top pick in the sector, supported by expanding contracted capacity, improving earnings visibility, and resilient dividend support (5.2% yield).
Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.
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