Aboitiz Equity Ventures net profit declines on lower power earnings

Manila Bulletin
by James Loyola
October 29, 2014

Aboitiz Equity Ventures reported a 14 percent to P14.3 billion in the first nine months of 2014 from P16.6 billion in the same period last year due to lower earnings from its power business.

AEV logoIn a disclosure to the Philippine Stock Exchange, AEV said power accounted for 72 percent, followed by the banking, food, and land development strategic business units (SBUs) with income contributions of 17 percent, 7 percent, and 4 percent, respectively.

For the period under review, AEV posted a non-recurring gain of P380 million (versus last year’s P128 million), due to the revaluation of its power businesses’ consolidated dollar-denominated liabilities and placements, and a one-off gain of P634 million from the sale of a couple of the group’s investments.

In addition, the power business booked a non-recurring cost for the acquisition of LiMA EnerZone Corporation (formerly LiMA Utilities Corporation) (LiMA EnerZone).

Adjusting for these one-off’s, AEV’s core net income amounted to P13.9 billion, which is 16-percent lower than last year.

“The drop in our net income does not affect the fundamental value of our businesses. Our future growth plans remain intact as we continue to strengthen our businesses in keeping with the country’s economic growth,” said AEV President Erramon I. Aboitiz.

He added that “we remain supportive of the government’s public-private partnership program, cognizant of the critical state of the country’s infrastructure.”

For the first nine months of 2014, Aboitiz Power Corporation registered an income contribution of P10.1 billion, an 8 percent dip from the previous year’s P11.0 billion. When adjusted for non-recurring items, the Power SBU recorded a 15 percent year-on-year (YoY) decline in its earnings share, from P12.1 billion to P10.3 billion.

AEV’s banking business contributed Banking SBU’s income contribution for the incurred a 28 percent drop in net income to P2.4 billion in the first nine months of 2014 from P3.3 billion last year due to lower trading gains.

Pilmico Foods Corporation reported a 1-percent YoY increase in its income contribution for the first nine months of 2014, from P932.1 million to P942.2 million.

The slow growth in earnings was due to the weak performance of the Feeds division, which registered a net income of P282 million for the first nine months of the year as a result of the decline in margins and expiration of the income tax holiday of Iligan Feedmill.

Aboitiz Land, Inc. (AboitizLand), registered YoY growth of 247 percent in its net income contribution for the first nine months of 2014 to P565.4 million from P162.8 million.

“We remain on track with our strategy to build AboitizLand into a national player in the real estate industry as we remain on the lookout for expansion opportunities in Luzon,” Aboitiz said. source