MANILA, Philippines – Conglomerate Aboitiz Equity Ventures grew its first-semester net profit by 1 percent year-on-year to P11.9 billion, as higher earnings from its banking and food businesses made up for the slack in profit out of the power business.
Excluding extraordinary items, AEV’s core net income for the first six months amounted to P11.7 billion, 3.5 higher than a year ago. One-off items included the following:
• A non-recurring gain of P217 million versus last year’s P508 million from the revaluation of consolidated dollar-denominated liabilities and placements;
• Gains of P1.27 billion from the sale of CitySavings Bank.
• The pre-termination of loans by the power unit resulting in a one-time write-off of the unamortized borrowing costs amounting to P71 million.
The power strategic business unit accounted for 67 percent of AEV’s six-month earnings, followed by the banking, food and real estate units with income contributions of 26 percent, 6 percent, and 1 percent, respectively.
“Our first semester performance figures are within our expectations. As a conglomerate, our earnings are diversified, which gives it more stability,” said AEV president Erramon Aboitiz.
“We remain excited about the opportunities that the public-private partnership projects of the government will bring to us,” Aboitiz added.
For the second quarter alone, AEV chalked up a consolidated net income of P5.1 billion, 15 percent lower year-on-year.
Excluding non-recurring items, AEV closed the quarter with a core net income of P6.2 billion, up by 6 percent year-on-year.
Flagship Aboitiz Power Corp. ended the first semester with an income contribution of P7.3 billion, down by 22 percent from the previous year.
When adjusted for non-recurring items, this unit recorded a 6 percent year-on-year decrease in its earnings share to P8.4 billion.
“The drop in earnings of the power business was made up by the stellar performances of the banking and food businesses,” Aboitiz noted.
The group’s average price for its power decreased by 11 percent year-on-year during the first half of 2013. This was attributed to the decline in both the average selling price of electricity sold to the spot market and average selling price under bilateral contracts.
On the other hand, income contribution from the banking business through Union Bank of the Philippines grew by 42 percent year-on-year to P2.8 billion in the first semester, driven by increases in both net interest income and other income.
AEV’s food unit, Pilmico Foods Corp., also recorded a 21 percent year-on-year increase in its first semester income contribution to P630.7 million.
This was mostly due to the strong performance of the farms division, in turn attributed to improved average selling price of market hogs.
Meanwhile, the flour division posted weaker performance during the second quarter as a result of softer prices, while the feeds division posted a modest 1 percent increase in income contribution as higher input costs continued to be a challenge.
On real estate, Aboitiz said the group’s investment in Aboitiz Land Inc. had begun to contribute to earnings.