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Investors buy shares in Ayala unit on earnings, Infigen pull out

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INVESTORS took positions on Ayala-led AC Energy Philippines, Inc. last week with analysts, attributing the move to market players digesting the earnings results released last month, as well as the divestment by an affiliate of its holdings in an Australian energy firm.

Data from the Philippine Stock Exchange (PSE) showed 171.89 million AC Energy Philippines shares worth P520.09 million exchanged hands from Sept. 7-11.

The Ayala energy unit closed at P3.18 apiece on Friday, 17.8% up week-on-week from its P2.70 per share finish on Sept. 4. For the year, the stock gained 38.9%.

“[AC Energy Philippines] has rallied [last week] as investors may have digested the company’s positive first-half results for this year. In addition, the market seems to be pricing in news articles regarding its growth plans and outlook for the coming quarters,” Timson Securities, Inc. Trader Darren T. Pangan said in an e-mail.

In a separate e-mail, Unicapital Securities, Inc. Equity Trader Cristopher Adrian T. San Pedro attributed the announcement of AC Energy, Inc.’s decision to divest its holdings in Australian firm Infigen Energy Ltd. as contributing to the stock’s movement last week.

“[The decision] buoyed investors to buy shares of the company to close at a new 52-week high of P3.18 per share,” Mr. San Pedro said.

Mr. San Pedro explained that the divestment provides the company additional cash flow to pursue other investments.

“Moreover, AC Energy remains committed to continue their investments in Australia so this decision is a win-win solution for the company,” he added.

AC Energy Philippines is the Philippine unit of AC Energy, Ayala’s arm in the energy sector.

In a disclosure to the PSE through holding firm Ayala Corp. last Thursday, AC Energy noted UAC Energy Holdings — a joint venture company in which AC Energy has a 75% stake — divested its 20% shareholdings in Infigen, citing the latter’s “potential delisting” in the Australian Securities Exchange. 

It was sold for A$0.92 per share to former rival bidder Iberdrola, S.A., a Spanish multinational utility firm. 

To recall, UAC Energy tried to fully acquire Infigen but later conceded to Iberdrola. Its old shareholdings were bought for an average price of A$0.794 per share. It previously said that its “offer was not predicated on control.”

UAC Energy’s investment in the Australian company was valued at A$178 million, or about US$128 million, if pegged against Iberdrola’s bid price.

Iberdrola is one of the biggest energy players in the world, having over 55 gigawatts of installed capacity in Spain, the United Kingdom, South America, and the United States. It powers around 34 million consumers worldwide. Presently, it owns three-quarters of Infigen’s shares, while it is still accepting more until Sept. 23.

Meanwhile, Infigen has a portfolio of renewable projects with 670 megawatts (MW) of capacity, after its share prices dropped with the fall in power prices in the country.

Despite withdrawing investments from Infigen, AC Energy said it would continue to invest in the country with its renewable projects in the pipeline located in four Australian states, citing the construction of its 720-MW New England solar farm in the coming months.

AC Energy is also developing a 250-MW hydropower plant and 300-MW solar farm in South Australia; a 160-MW solar facility in Victoria; and 1,200-MW renewable energy parks in northwest Tasmania.

Meanwhile, AC Energy Philippines saw its attributable income amount to P1.42 billion in the second quarter, reversing from a net loss of P406.60 million in the same period last year. For the first-half, its attributable income reached P1.96 billion, also a turnaround from the P551.87-million net loss in 2019’s comparable six months.

The first half saw additional assets being injected into the company. It has entered into a deal with AC Energy, which acquired shares equal to P2.97 each from the listed firm for its energy projects with 176 megawatts (MW) of capacity. These add to the 145-MW renewable energy projects that ACEPH bought early in the year.

Also contributing to its first-half profit is its thermal plants with higher availability and the greater contracted capacity sold through Manila Electric Co.’s generation bidding.

AC Energy Philippines is in the process of changing its corporate name to AC Energy Corp., signifying the integration of AC Energy’s domestic and foreign businesses.

It has yet to receive approval for the name change, even as the PSE has already signed off its stock symbol change to ACEN and took effect last Aug. 14.

“We expect the company to earn P1.5 billion this year to be spurred by the successful infusion of [ACEN]’s onshore assets, recent acquisitions, and higher contracted capacity of its thermal plants via the Meralco competitive selection process” Unicapital’s Mr. San Pedro said.

“The stock is expected to range between P3.03 support and P3.30 resistance in the short term with a medium target of P3.50 to P4.00 for as long as it stays above P3.00,” Mr. San Pedro said.

For Timson Securities’ Mr. Pangan: “Since the stock broke out of its immediate resistance at P3.16 [last Friday], we’ll have to observe [this] week if its psychological support area at P3.00 holds. The issue rallied with momentum for the past few days, and we’ll have to see if the positive sentiment towards this issue is maintained [this] week,” he said. — J.E. Hernandez





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