Aboitiz Equity income drops 3% to P21.2B

By Zinnia B. Dela Peña (The Philippine Star) Updated March 03, 2012 12:00 AM

MANILA, Philippines - Aboitiz Equity Ventures Inc. (AEV), the holding firm for the business intrusts of the Aboitiz clan, reported a three-percent drop in net income last year to P21.2 billion, weighed down by lower contributions from its power generation and food businesses.

In a filing with the Philippine Stock Exchange yesterday, AEV said power accounted for the lion’s share of net earnings at 78 percent, followed by the financial services and food units with 16 percent and six percent, respectively.

Aboitiz Power Corp., the group’s main energy unit recorded a double-digit drop in profits due to lower output and selling prices.

But it added higher sales in existing contracts and new power generation capacity will drive growth moving forward.

“Aboitiz Power closed 2011 with a consolidated net income of P21.6 billion, down by 14 percent year-on-year,” the company said.

For its contribution to AEV’s bottom line, Aboitiz Power Corp. chipped in P16.5 billion, lower than the previous year’s P19.1 billion. The power generation business posted net earnings of P15.6 billion, a decrease of 16 percent due to lower average selling price and net generation recorded for the period.

Selling prices declined seven percent given the softening of spot market prices at the Wholesale Electricity Spot Market (WESM). Demand for electricity was relatively flat compared to the previous year.

As of end 2011, Aboitiz Power’s attributable capacity was up 15 percent at 2,350 megawatts due to the assumption of full ownership of and control over the 70-MW Bakun hydro run-of-river plant, acquisition of the 242-MW Navotas power barges, the full completion of the rehabilitation of the Ambuklao hydropower facility, completion of the four-MW Irisan hydropower greenfield project, and the partial completion of the rehabilitation works at the Binga hydropower facility.

The power distribution business, on the other hand, reported a 24-percent increase in income contribution from P1.5 billion to P1.8 billion due to improved volumes and margin expansions.

Meanwhile, the banking business contributed P3.4 billion to AEV’s total earnings, up 31 percent year on year.

Of the total, Union Bank of the Philippines pumped in P2.9 billion or an increase of 26 percent year-on-year.

Private thrift bank City Savings Bank, Inc. also recorded a 69-percent jump in earnings contributions to AEV to P531 million. This was attributed to the increased ownership stake in CitySavings, coupled with the seven-percent improvement in the bank’s bottom line performance.