AEV posted a strong 4th quarter in 2006, earning a net income of P1.34 billion, a 124% jump from the same period in 2005. This includes some nonrecurring income from gains on sale of certain assets in the company's transport and food businesses.
The income contributions of all AEV business groups increased in 2006, with the biggest share coming from the power group at P2.26 billion, up 12% from 2005. The generation companies turned in P1.09 billion, up 3.4%, while the contribution of distribution utilities went up by 21% to P1.18 billion.
The power group's strong performance is expected to continue. In December 2006, the partnership between Aboitiz Power and SN Power of Norway won the bid for the 360 megawatt (MW) Magat hydroelectric plant in Isabela, the largest such facility to be privatized by government to date. Also, the company will soon commence construction of two Greenfield hydro power plants in Davao with a total capacity of 73 MW.
AEV's banking investments contributed P1.1 billion in 2006, up 7% from 2005. UnionBank's performance was affected by the interim impact of expenses related to the purchase of International Exchange Bank and the industry-wide margin compression as interest rates declined further.
The food group increased its income contribution by 34%, turning in P510 million. This result is attributed to strong performance from all its businesses, namely flour, swine and feeds, as well as a one-time gain of P39 million on the sale of its yeast business after divesting its entire stake in the joint venture Pilmico-Mauri Foods Corporation.
The transport group posted the highest percentage increase in contribution, turning in P142 million, a 313% jump from the previous year. The company had a solid 4th quarter and booked nonrecurring gains net of some write offs on sale of certain assets in the last quarter of 2006. Also, the company was able to continue lowering total expenses as a result of various cost-cutting initiatives put in place as early as two years ago.
AEV's cash balance as of December 31, 2006 increased to P8.02 billion. Its net debt to equity ratio stood at 0.72, while its current ratio was at _2.07:1.
In January, AEV succesfully placed its entire treasury shares holdings representing 742.5 million shares at a price of P8.20 per share equivalent to P6.1 billion or US$124 million. The offering saw high quality demand from approximately 60 institutional investors in US, Europe and Asia which has significantly increased the company's free float and further strengthened AEV's shareholder base. International investors took up 89% of the offering while domesitc investors took up 11%.
On February 23 AEV paid a cash dividend of P0.20 per share or a total of P1.14 billion to stockholders on record as of February 9, 2007.