Advertisement

Pandemic hits Aboitiz group’s first-half profit

Font Size

AEV-logo

By Adam J. Ang

ABOITIZ Equity Ventures, Inc.’s (AEV) net income in the first semester plunged by more than half as the global coronavirus pandemic continues to batter its businesses.

In a regulatory filing, Tuesday, the listed holding firm posted P4 billion in profit between January and June, down by 55% over the previous period. The huge drop in the income share of its power business influenced this decrease.

“The current COVID-19 (coronavirus disease 2019) crisis continues to disrupt and impact our organization in different ways,” said Aboitiz Group President and Chief Executive Officer Sabin M. Aboitiz.

The company realized non-recurring losses of P20 million, representing foreign exchange losses from the revaluation of its dollar-denominated assets. Excluding this, AEV’s core income is P4 billion, 54% lower year on year.

In the April-June period, the company earned P2 billion, down 63%.

Mr. Aboitiz said the group has focused on its “ability to adapt to changes and to prepare for uncertainties,” as it went through a turbulent period.

Making almost half of its parent’s income, Aboitiz Power Corp.’s contribution went down 57% to P2.9 billion in the first semester on falling profits of its generation and distribution segments.

The power firm saw its net income drop by 57% to P3.7 billion.

The bulk of this came from its generation and retail electricity supply businesses, which were affected by the decline in power demand during the quarantine months and forced outages of several of its generators.

Its distribution segment also posted reduced income share as its commercial and industrial customers consumed less electricity in the period.

The income share of UnionBank of the Philippines, forming 39% of AEV’s total income, went down 3% to P2.3 billion in the first-half period.

Its net income fell by 6% to P4.5 billion, despite gaining growth in net interest income, which expanded by 41% to P13.8 billion, and higher trading gains.

AEV’s food business units — consisting of Pilmico Foods Corp., Pilmico Animal Nutrition Corp., and Pilmico International Pte. Ltd., which includes Gold Coin Management Holdings Ltd. — increased their income share to its parent at P795 million, forming 14% of its total profit.

Its domestic food subsidiaries generated a combined income of P293 million. The company’s farm businesses shed P501 million because of the slump in selling prices and sales volume following the African swine fever outbreak in Luzon, as well as the drop in margins from higher farms and meat processing costs. Its feeds and flour segments posted higher income at P448 million and P346 million, respectively.

Further, its international food businesses grew its income by two times to P502 milion on the increase of equity ownership and volumes of Gold Coin’s operations in China, Vietnam, Malaysia and Sri Lanka.

AboitizLand, Inc. brought in lower income contribution to the company at P1.1 billion due to its decreased revenue.

The property business lost P39 million in the period as it felt the impact of the pandemic-induced quarantine policies. Its construction activities were halted between April to June.

Republic Cement & Building Materials, Inc. posted P10 million in foregone profit because of reduced demand for cement during the lockdown months.

The company is expecting a “better economy” in the second half as the country further adapts to the so-called new normal.

“For the rest of the year, our goal is unchanged: to remain resilient and for our business units to be in the best possible position when we emerge from this crisis, in order to support the country’s economic recovery,” Mr. Aboitiz said.

On Tuesday, shares in AEV increased by 1.02% to close at P49.50 each, while shares in AboitizPower inched up 0.19% to close at P25.95 apiece, while those of UnionBank rose by 1.06% to close at P52.55 each.





Advertisement