ABOITIZ Equity Ventures, Inc. (AEV) reported a 3% increase in first quarter consolidated net income to P4.8 billion despite its power business, the biggest contributor to the holding firm, reporting lower profit during the period.
AEV told the stock exchange the modest income growth came after lower one-off losses representing net unrealized foreign exchange losses.
“Our diversified portfolio gives us the resilience to sail through varying business cycles. The underlying strength of our core operations and a vibrant economy keep us optimistic on our long-term fundamentals,” said Erramon I. Aboitiz, AEV president and chief executive officer, in a statement.
Of AEV’s businesses, power accounted for 64% of total income, with banking and financial services contributing the second biggest at 30%, followed by land at 1%. Infrastructure had a negative 2% impact on the first quarter results, the company said.
During the period, Aboitiz Power Corp. reported a 9% drop in consolidated net income to P4 billion because of one-off losses.
“Despite the one-off adjustments we have to incur in the quarter, we continue to see modest growth of the group in both our generation and distribution business. On the positive note, we continue to see improvements in plant reliability and availability which has resulted to significant financial contributions,” Antonio R. Moraza, AboitizPower president and chief operating officer, said in a statement.
He said AboitizPower, the holding firm of the Aboitizes’ power business, continues to post growth in its distribution utility (DU) business “thanks to growing regional economies.”
The company recognized non-recurring foreign exchange losses on the revaluation of its dollar-denominated liabilities amounting to P1.2 billion, bigger than the previous year’s P577 million.
Without the one-off adjustments, AboitizPower said its core net income rose by 4% to P5.2 billion. The company also recorded an 11% growth in consolidated earnings before interest, tax, depreciation and amortization (EBITDA) to P11.9 billion.
“We look forward to further improving the operation of our power plants, while investing in technology to improve the services in the DUs. We are also looking forward to completing several power plant projects this year which will give us opportunities to contract and contribute to the growing economy,” Mr. Moraza said.
AEV’s banking business Union Bank of the Philippines contributed P1.4 billion to the holding firm’s profit or higher by 32% compared with its share in the previous year.
Pilmico Foods Corp. and its subsidiaries recorded a net income of P264 million, 10% lower than the level in the previous year because of higher cost of raw materials and operating expenses.
Aboitiz Land, Inc. and other the subsidiaries posted a combined net income of P59 million, down 18% after an increase in borrowing expenses to fund development projects.
The share of Republic Cement and Building Materials, Inc. swung to a P82-million loss, reversing the previous year’s net income contribution of P202 million due to higher energy input costs.
On Thursday, shares in AEV fell by 6.94% to P63 each, while shares in AboitizPower slipped by 2.84% to P37.60 each. — Victor V. Saulon