AEV sees drop in net profit

Conglomerate Aboitiz Equity Ventures posted a 7-percent year-on-year decline in net profit to P4.1 billion on lower earnings from the banking and property units.

AboitizPower accounted for 79 percent of the income while banking, food and property contributed 9 percent, 10 percent and 2 percent, respectively.

This translated to earnings per share of 74 centavos.

AboitizPower’s net profit rose by 4 percent year-on-year to P3.3 billion in the first quarter—4 percent higher than the previous year’s P3.2 billion. When adjusted for nonrecurring items, the earnings contribution of the power unit dipped by 1 percent year-on-year to P3.3 billion.

The income contribution of the generation unit was flat at P2.7 billion from a year ago. When adjusted for nonrecurring items, core net income declined by 6 percent to P2.7 billion.

The drop was attributed to the lower sales registered by the Tiwi-Makban plants, in turn due to a decline in steam flow during the period, as well as the implementation last February of the Binga plant’s new contract for ancillary services, which resulted in lower average prices.

The income contribution of the generation group was also affected by the expiration of the Magat plant’s income tax holiday starting last July 2014.

On the other hand, the earnings contribution of the power distribution group rose by 31 percent to P624.5 million. Attributable electricity sales for the quarter increased by 11 percent to 1,111 GWh from a year ago. The growth in sales was primarily driven by higher electricity sales across all customer segments, with residential, commercial, and industrial sales registering year-on-year growth of 7 percent, 5 percent and 14 percent respectively.

While pursuing its goal to increase capacity by an additional 2,000 MW in the next five years, AboitizPower continues to look at new opportunities here and abroad.

“We are looking at expanding the power business to select international markets through new projects and acquisitions. We are also relentlessly exploring new sources of renewable energy to provide the country with the right mix of energy sources. As you know, we recently partnered with United States-based SunEdison to explore the development of up to 300 MW of utility-scale solar photovoltaic power generation projects in the Philippines over the next three years,” AEV president and chief executive officer Erramon Aboitiz said.

UnionBank’s first quarter income contribution decreased by 48 percent year-on-year to P382 million on lower trading gains alongside some foreign exchange losses.

Food subsidiary Pilmico posted a 23-percent rise in first quarter income contribution to P415.7 million. The growth was propelled by the feeds business in the Philippines and Vietnam, which had offset the decline in the income from the farm and flour businesses. Flour sales dropped due to the increase in the cost of raw materials, while farm sales were also hurt by an oversupply of hogs.

On the property business, AboitizLand reported a 34-percent drop in core income contribution to P80.3 million. Total revenue for the first quarter of 2015 showed a decline of 13 percent due to the sale of Lima Utilities to AboitizPower in 2014. Excluding Lima Utilities’ revenue contribution, the land developer registered a 34 percent rise in its first quarter revenues.

“We continue our growth story as the group pursues its expansion both organically and through acquisition opportunities both here and abroad,” Aboitiz said.