Conglomerate Aboitiz Equity Ventures (AEV) posted an 8-percent year-on-year decline in its nine-month net profit to P16.6 billion due to foreign exchange losses and non-recurring loss booked by its flagship power unit from a loan pretermination.
Adjusting for these one-off items, AEV’s core nine-month net income amounted to P16.4 billion, or 7 percent lower than the year-ago level. This was due to the decline in the selling price of power.
For the third quarter, alone, AEV’s consolidated net income declined by 25 percent year-on-year to P4.6 billion also due to the revaluation of US dollar-denominated liabilities and placements. The resulting non-recurring loss was partially offset by the reversal of funds set aside as loss provision relating to certain equity transactions. Adjusting for these, AEV closed the quarter with a core net income of P4.7 billion, down by 25 percent year-on-year.
“We remain pleased with the performance of our business units. Our challenge in the coming years is to deploy the cash flow we are generating into ventures that meet our hurdle rates. For one, we are very keen on participating in the government’s public-private partnership projects,” AEV president Erramon Aboitiz said in a statement.
For the first nine months, AEV’s earnings translated to P3 per share.
The revaluation of consolidated dollar-denominated liabilities and placements resulted in a non-recurring loss of P1.1 billion for the period. In the meantime, AEV booked gains of P1.3 billion from the sale of City Savings Bank Inc. to banking arm Union Bank.
Overall, power accounted for 71 percent of the group’s income. It was followed by the banking, food and real estate units with respective income contribution of 22 percent, 6 percent and 1 percent, respectively.
Flagship Aboitiz Power Corp. registered an income contribution of P11 billion for the first nine months, 22 percent lower year-on-year. When adjusted for non-recurring items, this unit recorded a 12-percent year-on-year decline in its earnings share, to P12.1 billion.
The group’s average price for its power decreased by 12 percent year-on-year during the first nine months due to the decline in both the average selling price of electricity sold to the spot market (-23 percent) and the average selling price under bilateral contracts (-10 percent). Doris C. Dumlao