ABOITIZ EQUITY Ventures, Inc. (AEV) reported a first-half net income of P10.1 billion, lower by 2% compared with the P10.3 billion it recorded a year ago as the holding firm continued to suffer non-recurring foreign exchange losses on its dollar-denominated debt.
“Our first-half results reflect challenges that continue to test the resilience of our diversified portfolio,” said Erramon I. Aboitiz, AEV president and chief executive officer, in a statement on Wednesday.
AEV’s biggest income contributor, its power business, reported a 6% drop in income to P9.1 billion from P9.7 billion after booking non-recurring foreign exchange losses.
For AEV, the net foreign exchange losses reached P467 million, down from P495 million a year ago. Aboitiz Power Corp. placed these losses at P1.4 billion, bigger than last year’s P744 million.
During the semester, power contributed 68% of AEV’s income, followed by banking and finance at 22%, food at 22%, food at 6%, land at 3% and infrastructure at 1%.
“We continue to grow the business with the capacity additions and the expanding distribution business,” said Antonio R. Moraza, AboitizPower president and chief executive officer.
“Energy sales are up; however, margins are getting tighter due to competition. This is a reality that we have prepared for — and our organization is equipped to compete,” he added.
AboitizPower’s income contribution to AEV in the first-half dropped nearly 7% to P7 billion from P7.5 billion in the same period last year.
In contrast, UnionBank of the Philippines’ contribution rose by 9% to P2.3 billion from P2.1 billion. The bank and its subsidiaries recorded a net income of P4.7 billion, up 9% from P4.3 billion a year ago.
Pilmico Foods Corp. and its subsidiaries reported a net income of P662 million in the first semester, lower by 8% compared with P717 million a year earlier, largely because of higher raw material costs.
Aboitiz Land, Inc. posted a net income of P283 million, 40% higher than the P202 million recorded last year. Revenues for the period hit P2 billion, rising 30% from a year ago, due mainly to the industrial business having recognized more hectares sold.
Meanwhile, Republic Cement and Building Materials, Inc.’s income fell by 91% to P44 million from P494 million. The decline came because of the rise in fuel and power costs, which offset the modest growth in prices while demand stayed as is.
“For the rest of the year, we remain confident in ably executing our focused strategy. We look forward to more opportunities as well as the contributions of newly-acquired businesses as we stay true to our purpose of driving change for a better world by advancing business and communities,” Mr. Aboitiz said.
For AboitizPower, without the one-off losses its core net income was “flat” in the first- half at P10.5 billion. It recorded consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) of P24 billion, up 10% from the P21.8 billion a year ago.
Its consolidated EBITDA for the generation and retail supply business was at P20.2 billion, up 9% from the P18.5 billion recorded after the new contributions from Pagbilao Energy Corp.
“Higher contracting levels versus last year also contributed to the higher EBITDA. These upsides were partially offset by the lower contributions coming from the company’s hydro plants due to lower hydrology during the first six months of 2018,” the company said.
AboitizPower’s capacity sold for the period increased 8% to 3,319 megawatts (MW) from 3,086 MW, driven by new capacities sold from the Pagbilao plant.
For the first-half, the consolidated EBITDA of the distribution business was P3.9 billion, up 13% from the P3.4 billion. Energy sold during the period rose 7% to 2,719 gigawatt-hours (GWh) from 2,546 GWh.
The company said Improving margins also contributed to the increase in consolidated EBITDA during the period in review, resulting in a 14% increase in the income contribution of the distribution business to P2.1 billion.
On Wednesday, shares in AEV went up P2.35 or 4.10% to close at P59.70 each, while those of AboitizPower were higher by 75 centavos 2.02% at P37.95 apiece. — Victor V. Saulon