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Aboitiz Power Corp.

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By Lourdes O. Pilar
Researcher

ABOITIZ Power Corp. was one of the most actively traded stocks last week due to expectations of higher demand for energy in the closing months of 2018 as well as the company’s recent acquisition in Ayala-led AC Energy Inc.’s assets.

A total of 32.99 million AboitizPower shares worth P1.039 billion were traded at the exchange last week from Nov. 12-16, data from the Philippine Stock Exchange showed, making it the ninth most actively traded stock last week.

Its share price last Friday was down by 2.62% to P31.65 apiece on a week-on-week basis versus its P32.51 share closing price on Nov. 9. It is likewise down by 23.6% year-to-date.

“AP may have drawn investor interest in light of what we may refer to as its rationalization of its incumbent power generation assets. It had earlier raised its stake in a number of assets as well as having earmarked funds to rehabilitate others,” said Philstocks Financial, Inc. Research Head Justino B. Calaycay, Jr.

“The recent drop in global oil prices may have also lent optimism on its margins going forward in light of an expected uptick in seasonal demand for power and energy,” he added.




Mr. Calaycay likewise noted the company posted solid numbers during the first three quarters, and is expected to sustain this in the fourth quarter.

“Over the longer haul, its increased stake in a handful of power assets and the rehabilitation of some should gradually provide positive contributions going forward,” he said.

For Regina Capital Development Corp. Managing Director Luis A. Limlingan: “As AP is an index constituent and recently reported earnings, it was natural for the company to be one of the most active stocks traded.”

In terms of financials, Mr. Limlingan underscored the company’s earnings before interest, tax, depreciation and amortization of P39.1 billion in the first nine months of 2018, which is 11% higher than the P35.4 billion recorded in the same period last year on account of higher contributions from Pagbilao Energy Corp. and Hedcor Bukidnon, Inc.

AboitizPower posted a net income attributable to the parent of P7.55 billion in the third quarter of 2018, 25.4% higher than the P6.03 billion in the same period a year ago. This brought the year-to-date figure to P16.67 billion, an increase of 6% from P15.75 billion in last year’s comparable nine months.

In September this year, AboitizPower bought voting and economic stakes in AA Thermal, Inc., the thermal power company of Ayala-led AC Energy, Inc. The acquisition will give it a 49% voting stake and 60% economic stake in the thermal platform. The transaction came about four months after AC Energy first announced it was selling as much as half of its thermal energy platform.

AC Energy said its thermal platform initially consists of its partnership interests in GNPower Mariveles Coal Plant Ltd. Co. and GNPower Dinginin Ltd. Co. The former is the owner and operator of an operating two-unit coal plant in Mariveles, Bataan each with a capacity of 316 megawatts (MW). GNPower-Dinginin, meanwhile, is developing a supercritical coal-fired power plant with two identical units with a net capacity of 668 MW each.

The agreement with AC Energy will increase AboitizPower’s ownership in the Mariveles coal plant to 78.325% (from 66.1%), and in the Dinginin coal plant project to 70% (from 40%) in line with its target to increase its energy capacity to 4,000 MW by 2020.

Meanwhile, subsidiary Therma Power Visayas, Inc. is set to rehabilitate the 153.1-MW Naga Power Plant Complex (NPPC) in Cebu, expecting to achieve commercial operations for at least one of the six units before the end of 2018 and for all units before the end of 2019.

Going forward, Philstocks’ Mr. Calaycay, gave AboitizPower an initial support range between P29-P29.50 with initial technical resistance close to the P34-P35 marks: “Its share price remains dependent on the whims of the market (as in all and every stock.) At this point, it is the general mood that poses the highest challenge,” he said.

Regina Capital’s Mr. Limlingan gave the stock a support price of P31.20 and resistance of P32.00.

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