ABOITIZ Equity Ventures, Inc. (AEV) is banking on the recovery of its power business to push earnings higher this year, after it saw a 27% profit decline in the first quarter.
“What happened to us in the first quarter, it was a temporary situation. The business should be running already basically where we expected it to be,” AEV Chief Financial Officer Manuel R. Lozano told reporters recently.
The listed conglomerate delivered a consolidated net income of P3.5 billion in the January to March period, lower than the P4.8 billion it posted in the same period a year ago. This came amid a 28% uptick in gross revenues to P47.40 billion for the same period.
Mr. Lozano noted that Aboitiz Power Corp. mainly dragged the previous quarter’s results, as they had to purchase power which were priced higher at the time due to outages and over-contracting in preparation for the opening of Therma Visayas, Inc. (TVI).
“So what we’re seeing is that that requirement for purchase power has already been decreasing, so we should be seeing better results moving forward. Probably part of the second quarter will still be affected,” Mr. Lozano explained.
Alongside delays in operating TVI, AboitizPower also experienced the unexpected shutdown of its geothermal plants for the quarter.
“Those delays should already be behind us. The outlook has improved versus where we were a few months ago,” Mr. Lozano said.
The two-unit TVI plant with a combined capacity of 340 megawatts (MW) started operations this second quarter. The facility will deliver power to Visayan Electric Co. Inc. and electric cooperatives, as well as open-access customers in Luzon and Visayas.
The company also expects the first unit of its 668-MW GNPower Dinginin Ltd. Co. to go online later this year. The second unit of the super-critical coal-fired power plant in Dinginin, Bataan is scheduled to start commercial operations in 2020.
Mr. Lozano said they continue to be scouting for opportunities in the renewable energy space in the country as well as regional markets such as Indonesia, Vietnam, Myanmar, and Malaysia.
“We’re looking at solar, wind, and hydro. Those are the main opportunities we found in those countries… Hopefully within the next six to 12 months some of these will already start to become more concrete,” Mr. Lozano said.
AEV recently raised P5 billion from the issuance of fixed rate bonds at the Philippine Dealing and Exchange Corp. The company is planning to offer more bonds to the public as part of its P30-billion debt securities program, as it looks for more acquisitions that could further expand its business. — Arra B. Francia