Power unit drags down AEV net income

Manila Times.net

ABOITIZ Equity Ventures Inc. (AEV) said its profit fell by double-digits in the first quarter, dragged mainly by the lower electricity prices and sales of its power unit.

In a disclosure to the Philippine Stock Exchange, AEV said its consolidated net income dropped 26 percent to P4.6 billion in the first three months from P6.2 billion in the same period last year.

Without non-recurring gains, AEV’s core net income for the January to March period amounted to P4.3 billion, 28 percent lower than last year.

Except for City Savings Bank, all its other business units posted lower income contributions.

Aboitiz Power Corp. (AP) accounted for 85 percent of the conglomerate’s net income, followed by its banking and food units, which contributed 9 percent and 6 percent, respectively.

AP’s profit contribution fell 32 percent to P3.9 billion from P5.7 billion in the previous year.

When adjusted for non-recurring items, the power business’ earnings fell 34 percent from P5.4 billion to P3.6 billion.

AEV’s banking units Union Bank of the Philippines and City Savings registered mixed performance in the first three months of the year.

UnionBank’s earnings contribution dropped by a tenth to P319 million on the back of higher expenses and lower income from securities trading and investment securities. At end-March,
AEV owned close to 41 percent of the listed bank.

Income contribution of non-listed thrift bank City Savings surged 294 percent to P102 million on higher interest income from loans and services. This was boosted by AEV’s increased ownership in the bank from 36 percent to 99.25 percent.

Wholly owned food-manufacturing unit Pilmico Foods Corp. recorded a 24-percent drop in its income contribution from P372 million to P282 million.

The decrease in profit was attributed to higher input costs despite volume increases across all business and higher selling prices for the quarter.

The bottom-line contribution of the flour, feeds and swine segments for the first quarter of 2011 was reduced by 18 percent, 27 percent and 28 percent, respectively.

AEV shares closed at P37.55 apiece, down from P39.20 the day before, while UnionBank shares dropped to P60 from P60.50.KRISTA ANGELA M. MONTEALEGRE