ABOITIZ Equity Ventures, Inc. (AEV) reported a 64% drop in core net income to P3.2 billion in the first quarter as its business units registered slower growth during the period.

Including one-off items, consolidated net income fell by 54% to P3.9 billion in the first three months of 2022, it added.

“The company recognized nonrecurring gains of P766 million during the period, primarily due to foreign exchange gains from the revaluation of dollar-denominated assets, compared to the P211 million in nonrecurring losses for the corresponding period in 2021,” AEV said in a disclosure on Wednesday.

Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) was also lower by 28% to P13 billion year on year.

Excluding extraordinary items such as liquidated damages, business interruption claims, Typhoon Odette, advanced outages, as well as extraordinary trading gains, net income for the first quarter would have been lower by 4% compared with the same period in 2021.

“2022 started with a strong sense of optimism coming out of the pandemic with the reopening of borders, resumption of travel, and reduction of cases through vaccination — all resulting in economic recovery in the first quarter,” AEV President and Chief Executive Sabin M. Aboitiz said in a statement.

Mr. Aboitiz said that although new global disruptions emerged with the continuing conflict in Ukraine, the group is prepared to deal with uncertainties through its “agile and resilient mechanisms and mindsets that were deeply embedded in our organization long before the pandemic.”

AEV’s energy company, Aboitiz Power Corp., accounted for 41% of total income contributions from business units, followed by financial services at 36%, food at 14%, real estate and infrastructure at 4% each.

AboitizPower’s net income for the quarter went down by 53% to P2.9 billion from P6.2 billion in the similar period a year earlier.

The energy unit recognized nonrecurring losses of P22 million during the period, primarily due to the revaluation of dollar-denominated liabilities, compared with the nonrecurring losses of P29 million in the same period in 2021.

The firm noted that its core net income a year ago included liquidated damages for the delay in the construction of GNPower Dinginin Ltd. Co. and business interruption claims for the plant outages of GNPower Mariveles Energy Center Ltd. Co.

“AboitizPower was also hit during the first quarter of 2022 with outages related to Typhoon Odette and had to advance planned outages in anticipation of the country’s 2022 national elections,” AEV said.

It added that if AboitizPower excluded these nonrecurring items and events “the first quarter of 2022 would have resulted in only a 4% decline in consolidated net income compared to the same period in 2021.”

In the first quarter, the generation and retail electricity supply businesses were down 47% to P3.2 billion, accounting for 81% of AboitizPower’s total income contribution.

Capacity sold for the period increased by 1% to 3,534 megawatts (MW) compared with the 3,558 MW sold in the same period last year.

Meanwhile, energy sold decreased by 1% to 6,055 gigawatt-hours (GWh) for the first quarter, compared with 6,130 GWh in the same period last year.

AboitizPower’s distribution business segment recorded an income of P742 million, or 32% down in the first quarter. The segment accounts for 19% of total income contributions.

Meanwhile, AEV’s banking and financial units also posted lower growth.

UnionBank of the Philippines and its subsidiaries recorded a net income of P2.6 billion in the first three months, 45% lower year on year.

“This was due to extraordinary trading gains recorded in the first quarter of 2021,” AEV said.

Meanwhile, recurring income grew to P9.4 billion, 21% higher year on year due to higher net interest income and fee income. Net interest income grew 12% to P8.1 billion due to higher yields in earning assets, coupled by lower cost of funds from the expansion of its current account and savings account or CASA deposits.

“Fee income, on the other hand, grew on the back of higher InstaPay and interchange fees,” AEV said.

Loan-loss provisions went down by 78% to P504.5 million while the nonperforming loan or NPL ratio remained stable at 5.2% as of end-March this year.

UnionBank’s earnings performance for the first quarter resulted in a return on equity of 9% and a return on assets of 1.2%.

AEV’s non-listed food subsidiaries Pilmico Foods Corp., Pilmico Animal Nutrition Corp,, and Pilmico International Pte. Ltd. reported lower net income during the period.

The agribusiness segment, which consists of the regional animal nutrition businesses, reported a net income of P211 million or 37% lower than the P334 million recorded in the same period in 2021.

AEV said that the decrease was due to the recognition of unrealized foreign exchange losses from the devaluation of the Sri Lankan rupee.

In the real estate segment, Aboitiz Land, Inc. and its subsidiaries along with Lima Land, Inc. reported a 48% rise in consolidated net income to P390 million.

At the stock exchange, AEV shares went down by 2.85% or P1.60 to P54.50 apiece. — Luisa Maria Jacinta C. Jocson