Power unit drags Aboitiz Group earnings

Manila Times.net
Published : Saturday, November 05, 2011 00:00 
Written by : Krista Angela M. Montealegre, Reporter


ABOITIZ Equity Ventures Inc. (AEV) recorded a single-digit expansion on its third quarter earnings, but lower sales and selling price of its power business continue to drag the conglomerate’s net income in the first nine months of the year.
In a disclosure to the Philippine Stock Exchange, the listed holding firm said its consolidated income rose by 5 percent to P5.8 billion in the third quarter.


For the three-month period, AEV recorded one-off gains amounting to P11 million from last year’s P528 million, while an associate company of Aboitiz Power Corp. (AP) also incurred a one-time gain of P149 million as it reversed an accrued expense booked in 2010 relating to its independent power producer administration contract.


AEV also booked a non-recurring net loss of P138 million from the revaluation of consolidated dollar-denominated loans and placements.


Adjusting for these one-off’s, AEV’s core earnings for the quarter ending September expanded by 16 percent to P5.8 billion.


The conglomerate ended the first nine months of the year with a consolidated net income of P16 billion, recording a decline of 5 percent year-on-year.


Minus one-time gains, AEV’s core earnings for January to September period fell by 6 percent to P15.5 billion.


AP accounted for 77 percent of the conglomerate’s net profit in the first three quarters, followed by its banking and food units, which contributed 17 percent and 6 percent, respectively.


AP’s income contribution dropped to P12.4 billion in the nine-month period from last year’s P14.2 billion. When adjusted for non-recurring items, the company recorded a 14 percent reduction in its earnings share from P13.8 billion to P11.9 billion.


AEV’s banking units Union Bank of the Philippines and City Savings Bank posted growth in the first three quarters, recording a 38 percent year-on-year improvement to P2.7 billion from P1.9 billion.


Union Bank’s earnings contribution jumped 26 percent year-on-year to P2.3 billion on higher total interest income from loans other banks as well as improved non-interest income as the bank continued to take profit in its securities position


Income contribution of non-listed thrift bank City Savings surged 227 percent to P360 million, buoyed by higher interest income from loans and service fees coupled with the increase in AEV’s ownership in the bank from 40.6 percent to 99.3 percent.


Wholly owned food-manufacturing unit Pilmico Foods Corp. recorded a 24-percent drop in its earnings contribution from P1.2 billion to P937 million.


The decrease in profit was attributed to higher input costs despite a 16-percent increase in volume in the feeds and swine operating divisions as well as higher average selling prices booked by the flour and feeds units.


The bottom-line contribution of the flour and swine segments fell by 45 percent and 44 percent, respectively, with only the feeds unit recording a positive growth rate of 9 percent.


AEV shares rose to P40.45 on Friday from P40.30 each on Thursday, while AP shares rose to P29.40 from P29.15. UnionBank shares fell to P61.45 from P61.50.


With report from Euan Paulo C. Añonuevo