AEV nets P7.8 billion in first half

CONGLOMERATE Aboitiz Equity Ventures Inc. posted an 18-percent year-on-year decline in first semester net profit to P7.8 billion due to lower earnings contribution from its power and banking units.

Power accounted for 75.9 percent of earnings, followed by the banking, food and property businesses with income contributions of 10.6 percent, 10.9 percent, and 2.6 percent, respectively.

There was a non-recurring loss of P109.7 million – versus last year’s one-time gain of P785.2 million – which largely resulted from the revaluation of the power unit’s consolidated dollar-denominated liabilities and placements. Adjusting for these one-off items, AEV’s core net income amounted to P7.9 billion, 9 percent lower year-on-year.

“We will continue to pursue our strategic growth plans as we strengthen our businesses in line with the country’s economic growth and requirements. Expansion opportunities abound, not only on the domestic front, but beyond our borders as well,” AEV president Erramon Aboitiz said in a press statement on Thursday.

“We are preparing our organization to seize these opportunities given the right timing and circumstance,” he added.

Flagship unit Aboitiz Power Corp. ended the semester with an income contribution of P6.2 billion, 9 percent lower year-on-year, as the average price of its energy sales decreased by 26 percent. This was in turn mostly due to the 28 percent decrease in the average selling price of the group’s bilateral sales as fuel costs continued to decline.  The average rate for ancillary services was also down by 10 percent year-on-year due to the implementation of the Binga plant’s new contract for ancillary services towards the end of February 2014.

Income contribution from Union Bank of the Philippines also recorded a 42 percent year-on-year decline to P866.4 million. The decline was due to trading losses amounting to P300 million, a reversal of almost P1 billion trading gains in the same period last year. The bank grew its loan book in the first semester by 14 percent year-on-year to P158.6 billion, propelled by the robust growth of retail loans.

Meanwhile, AEV’s non-listed food subsidiary, Pilmico Foods Corp. posted a growth of 37 percent year-on-year in its first semester income contribution to P885.2 million. This was propelled by the local feeds business whose income contribution almost doubled to P321 million. The newly acquired feeds business in Vietnam also contributed P79.5 million. The growth in income of both the feeds and flour businesses made up for the slack in the farm unit, whose income contribution fell by 24 percent year-on-year to P131.2 million on account of lower prevailing market selling price.

Property arm Aboitiz Land Inc. grew net income contribution in the first semester by 18 percent year-on-year to P213.1 million. Real estate revenues went up by 48 percent year-on-year to P1.2 billion, mainly driven by the strong industrial lot sales generated by Lima Land.