November 7, 2019 |
12:07 am
By Victor V. Saulon, Sub-Editor
ABOITIZ Equity Ventures
Inc. (AEV) posted a 6% drop in third-quarter net income to P6.8 billion as its
power business segment, the biggest contributor to its bottom line, recorded a
double-digit profit fall during the period.
“Despite challenges in
our power business, better operating performance in our non-power businesses
provided resilience to our investment portfolio. As we fund our growth
projects, we look to further broaden and strengthen our diversification in the
Philippines and overseas,” said Erramon I. Aboitiz, AEV president and chief
executive officer.
During the July to
September period, the holding firm also recognized a non-recurring loss of P234
million in unrealized foreign exchange losses, reversing the P60-million gains
in the same period a year ago.
Without the one-time
losses, AEV said its core net income was down by 2% to P7 billion. Consolidated
earnings before interest, tax, depreciation and amortization (EBITDA) for the
quarter rose by 4% to P18.3 billion.
Aboitiz Power Corp.
recorded a 36% decline in its third-quarter income to P4.8 billion after
recognizing non-recurring losses of P340 million, bigger than the P326 million
one-off losses a year ago.
AboitizPower’s core net
income fell by 35% to P5.1 billion because of lower EBITDA, interest expense
from the bonds issued in October 2018, and take-up of interest and depreciation
expenses from Hedcor Bukidnon, Inc. and Therma Visayas, Inc.
“It has been a tough
year for AboitizPower with the supply issues that resulted in the high cost of
replacement power for our customers. The company has also generated lower
revenues from the spot market due to challenges that caused some of our power
plants to shut down,” said Emmanuel V. Rubio, AboitizPower chief operating
officer.
“Despite this, our
customer base continues to grow, which underscores the consumers’ trust and
confidence in AboitizPower. Moreover, we remain confident that with our
incoming capacities, we will surpass our 2020 target of 4,000 megawatts
attributable capacity, ensuring sustainable growth for the company, our
shareholders, and the customers and communities we serve,” he added.
For the nine months to
September, AEV recorded a 9% drop in its net income to P15.7 billion after
recognizing non-recurring losses of P155 million, representing net foreign
exchange and derivative losses.
Although lower than the
previous year’s P407 million, the one-off losses weighed down its core net
income by 10% to P15.9 billion. AEV’s EBITDA was also lower by 2% to P44.8
billion.
Power made up 60% of
the total income contributions from AEV’s strategic business unit. Financial
services, food, real estate, and infrastructure units contributed 25%, 6%, 5%
and 4%, respectively, to the total income.
As of end-September,
AboitizPower’s income contribution was down by 19% to P10.4 billion, while on a
stand-alone basis, its core net income dropped by 26% to P13.7 billion.
Including non-recurring losses of P220 million, net income was P13.5 billion,
19% lower compared with the level a year ago.
The generation and
retail electricity supply made up 80% of the contributions from the business
segments, although the figure was down 18% to P12.6 billion.
Consolidated EBITDA
fell by 13% to P28.7 billion, driven by the higher volume and cost of purchased
power, lower spot market revenues, and lower plant availability.
Power capacity sold
during the period went down by 1.5% to 3,123 megawatts (MW) from 3,169 MW a year
ago because of lower energy availability. The power distribution business
accounted for 20% or P3.1 billion, although lower by 6% compared with a year
ago.
Meanwhile, Union Bank
of the Philippines’ income contribution to AEV rose by 41% to P4.2 billion. On
a stand-alone basis, the bank and its subsidiaries recorded a net income of
P8.5 billion, 40% higher from a year ago, due to the strong revenues from the
sustained double-digit growth in earning assets and strong trading gains.
AEV’s non-listed food subsidiaries
contributed P1 billion to AEV, down by 31% from the previous year. These units
are Pilmico Foods Corp., Pilmico Animal Nutrition Corp., and AEV International
Pte. Ltd.
AboitizLand, Inc.,
which is also not listed, along with its subsidiaries recorded a net income of
P829 million or more than double the previous year due to the fair valuation
gains on investment properties, which were not present a year ago.
For the infrastructure
group, Republic Cement & Building Materials, Inc.’s income contribution to
AEV amounted to P631 million, nearly three times the previous year, because of
the improved controls on production costs, increased private sector demand, and
the completion of several debottlenecking projects.
On Wednesday, shares in
AEV fell by 3.89% to P54.40 each, while those of AboitizPower slipped by 3.09%
to P39.15 apiece.
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