Aboitiz Equity’s bottom line dented by forex losses

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FOREIGN EXCHANGE losses weighed on the earnings of Aboitiz Equity Ventures, Inc. (AEV) in the third quarter, according to a disclosure to the stock exchange on Wednesday.

The holding firm of the Aboitiz family delivered a consolidated net income of P5.6 billion in the July to September period, down 14% from P6.6 billion in the same period last year.

AEV widened its non-recurring losses to P720 million from P117 million a year ago stemming from the recognition of forex losses upon revaluation of dollar-denominated liabilities and pre-termination costs on the refinancing of a subsidiary’s debt.

Without the one-off losses, the quarterly core net profit was 5% lower year on year to P6.4 billion from P6.7 billion.

As a result, AEV’s net income from January to September slid to P15.9 billion, down 7% from P17.1 billion a year ago, as the strength of its power business failed to offset the impact of forex losses and the weakness of its banking, food and infrastructure units.

Excluding extraordinary items, core net earnings remained almost flat at P17.1 billion.

In a separate statement, Aboitiz Power Corp. said it netted P15.7 billion in the first nine months of the year, an improvement of 4% from a year ago due to fresh contributions from the GNPower Mariveles Coal Plant Ltd. Co. thermal power plant and the strong performance of its various hydro power plants.

Without nonrecurring losses, core net income grew 15% to P17.5 billion from P15.2 billion.

“The significant growth in our generation business highlights our balanced strategy as both our renewable and thermal plants contributed to our nine-month performance…,” said Antonio R. Moraza, AboitizPower president and chief operating officer.

The contribution of AboitizPower to AEV rose 4% year on year to P12.1 billion from P11.6 billion.

Meanwhile, Union Bank of the Philippines’ income share to AEV declined 21% to P3.1 billion from P4 billion.

On a stand-alone basis, UnionBank and its subsidiaries netted P6.4 billion, down 22% compared to the P8.1 billion earned in the same period last year.

Excluding securities trading gains, the bank’s earnings grew 44% to P6.1 billion from P4.3 billion.

The Pimlico Group’s share to AEV’s earnings dropped 14% to P1.2 billion from P1.4 billion due to lower margins and higher operating costs seen by the feeds and flour business.

Real estate arm AboitizLand, Inc. saw 128% boost in net income to P340 million on the back of higher sales by the industrial business unit and notable sales and construction progress by the residential business segment.

A slowdown in cement demand significantly pulled down Republic Cement and Building Materials, Inc.’s income contribution to AEV by 80% to P249 million from P1.3 billion last year when sales got a boost from the election season.

On Wednesday, shares in AEV shed P1.25 or 1.68% to settle at P73.05 each, while shares in AboitizPower added 30 centavos or 0.72% to close at P41.70 apiece. — Krista Angela M. Montealegre