ABOITIZ Equity Ventures, Inc. (AEV) posted a 27% decline in first-quarter consolidated net income to P3.5 billion from P4.8 billion a year ago, due in part to non-recurring losses, the company told the stock exchange on Thursday.
Without the one-time losses, the holding firm’s core net income at P3.9 billion during the quarter was lower by 27% compared with the previous year’s level.
During the January to March period, the firm recognized non-recurring losses of P334 million, primarily because of unrealized foreign exchange losses from the revaluation of dollar-denominated assets and recognized losses on derivatives, which were lower than the P424-million foreign exchange losses in the same quarter last year.
Power accounted for 71% of the total income contributions from AEV’s strategic business units, while financial services accounted for 27%. The rest came from food, infrastructure and property businesses.
LOWER PROFIT FROM POWER
During the quarter, Aboitiz Power Corp. registered a consolidated net income of P3.6 billion, down 9% from the P4 billion posted in the same period last year. Its net income contribution to AEV likewise slipped 9% to P2.8 billion.
AboitizPower’s non-recurring losses of P440 million were significantly lower compared with the P1.2 billion a year ago. Without the one-off losses, core net income was P4.1 billion, or lower by 21% because of the higher volume and cost of purchased power.
“It has been a challenging first quarter for the industry and AboitizPower. The planned maintenance shutdown of power plants in preparation for the upcoming elections, coupled with forced outages, resulted in the grid’s thinning reserves. Despite this, our customers remain our top priority and we ensured delivery of replacement power from the spot market,” said Emmanuel V. Rubio, AboitizPower executive vice-president and chief operating officer.
AboitizPower said spot market prices were “exceptionally high” during the quarter, and the company purchased replacement power due to outages and over-contracting in preparation for Therma Visayas, Inc. (TVI) coming online.
The company registered consolidated earnings before interest, tax, depreciation, and amortization (EBITDA) of P10.4 billion, down 13% from the P11.9 billion a year ago.
AboitizPower’s generation and retail supply business posted a consolidated EBITDA of P8.6 billion, 15% lower than the P10.1 billion previously. The drop was largely because of the higher volume and cost of purchased power.
Capacity sold for the first quarter slid 7% to 2,947 megawatts (MW) from 3,174 MW.
“We are excited with new supply contracts and new power plants that have started to deliver power to the grid, which should contribute to our bottom line starting this year,” Mr. Rubio said.
“We will continue to pursue our renewable energy projects as we look forward to the implementation of the Green Energy Option Program and Renewable Portfolio Standards. We are committed to continue providing the country with adequate power supply that is affordable and sustainable,” he added.
BANKING INCOME DROPS
Meanwhile, the Aboitiz banking unit Union Bank of the Philippines recorded a 25% drop in income contribution to AEV to P1.1 billion from P1.4 billion a year ago.
On a stand-alone basis, UnionBank and its subsidiaries recorded a net income of P2.2 billion, down by 26% from P2.9 billion a year ago. Still, the bank’s recurring income improved as net interest income and fee income increased to P4.7 billion and P530 million, respectively, from P4.6 billion and P313 million previously.
UnionBank’s earnings performance translated in a return on equity of 9.6%, return on assets of 1.3%, and revenue-to-expense ratio of 1.6x.
AEV’s non-listed food subsidiaries Pilmico Foods Corp., Pilmico Animal Nutrition Corp., and Pilmico International Pte. Ltd., which now includes Gold Coin Management Holdings Ltd., reported a consolidated net income of P137 million, a 48% decrease from the P264 million.
Feeds Philippines’ net income of P12 million was 89% lower because of the increased raw materials costs.
AEV’s non-listed real estate segment, comprising AboitizLand, Inc. and its subsidiaries, recorded a consolidated net loss of P44 million, reversing the previous year’s P59-million net income.
This decrease was due to the deferred revenue recognition of industrial lot sales combined with higher direct project expenses, the company said.
For the infrastructure group, Republic Cement & Building Materials, Inc.’s first-quarter contribution to AEV was a net loss of P32 million, 61% lower than the P82-million net loss reported a year ago.
“This was mainly due to improved control on production costs in addition to stable market prices and private sector demand,” AEV said. — Victor V. Saulon
