CONGLOMERATE Aboitiz Equity Ventures Inc. posted a 13-percent decline in 2014 net profit to P18.4 billion due to lower earnings contributed by its power and banking businesses.
For the fourth quarter alone, AEV’s net profit fell by 8 percent year-on-year to P4.1 billion, the company disclosed to the Philippine Stock Exchange on Wednesday.
For the full year, the power business accounted for 71 percent of total earnings, followed by banking, food and land development, with a respective income contribution of 18 percent, 7 percent, and 4 percent.
Taking out non-recurring items, AEV’s core net income for 2014 dropped by 15 percent to P17.9 billion. A non-recurring gain of P436 million was incurred from the revaluation of the consolidated dollar-denominated liabilities and placements of its flagship power unit and a one-off gain of P634 million from the sale of a couple investments. AboitizPower also booked a non-recurring expense from the acquisition of electricity distribution firm Lima Utilities Corp.
AboitizPower’s 2014 net income dropped by 10 percent to P16.7 billion, after booking a non-recurring loss of P135.6 million mostly due to the revaluation of consolidated dollar-denominated loans and placements. Adjusting for these one-offs, its core net income for the year amounted to P16.8 billion, down by 16 percent from a year ago.
In terms of income contribution to parent firm, Aboitiz Power’s share in earnings also dropped to P12.7 billion from P14.2 billion in the previous year. When adjusted for non-recurring items, its earnings contribution dropped further by 16 percent to P12.9 billion.
AboitizPower is nevertheless continuing to expand and setting side P52 billion in capital expenditure this year. “In the next five years, we intend to increase our beneficial capacity by approximately 2,000 megawatts, providing reliable and competitive power meeting the economy’s increasing energy demands. We will build renewable power where it makes sense and will always remain resolute in protecting the environment and the interests of our host communities,” said Erramon Aboitiz, chief executive officer of both AEV and AboitizPower.
Income contribution of banking arm Union Bank also declined by 21 percent to P3.2 billion in the absence of exceptional trading gain earned in the previous year.
On the other hand, the group’s food unit, Pilmico Foods Corp. posted a 4-percent earnings increase to P1.3 billion. The growth was propelled by the farm business whose net income soared by 101 percent to P377 million, making up for the slack in earnings from flour and feeds .
Property unit Aboitiz Land posted a net income increase of 132 percent to P633 million. The company also breached the P3-billion revenue mark, up by 86 percent from last year.
Moving forward, AEV sees more growth opportunities from infrastructure investments, which the conglomerate is grooming to be the fifth leg of its business.