Conglomerate Aboitiz Equity Ventures (AEV) booked a 7-percent year-on-year drop in first quarter net profit to P4.7 billion as higher expenses gnawed on the earnings of its flagship power business.
Excluding non-recurring items, AEV’s core net income for the quarter was 5 percent higher year-on-year at P5.1 billion.
Aboitiz Power Corp.’s (AboitizPower) income contribution to AEV decreased by 13 percent year-on-year to P3.4 billion as income performance also recorded a 13 percent decline to P4.4 billion. The power generation business, which accounted for 81 percent of AboitizPower’s business, declined due to higher interest and depreciation expenses from the initial take up of GNPower-Mariveles costs, and increase in unrealized foreign exchange and mark-to-market losses.
At the AEV level, power accounted for 67 percent of the group’s total earnings while income contribution of the banking and financial services, food, infrastructure, and property businesses were at 22 percent, 6 percent, 4 percent and 1 percent, respectively.
AEV recognized non-recurring losses of P442 million – versus last year’s gain of P186 million – coming from foreign exchange losses from dollar-denominated liabilities and mark-to-market losses on hedging instruments.
Consolidated cash flow as measured by earnings before interest, tax, depreciation and amortization (EBITDA) stood at P12.7 billion, recording an increase of 14 percent year-on-year.
“Our performance reflects the underlying strength of our core operating businesses as we continue to invest for the future. In pace with the country’s upward growth momentum, we will use our gains to create long-term value for all our stakeholders,” Erramon Aboitiz, AEV president and chief executive officer, said in a press statement on Friday.
Union Bank of the Philippines’income contribution to AEV increased by 30 percent year-on-year to P1.1 billion. Together with its subsidiaries, the bank recorded a net income of P2.2 billion for the first quarter of 2017, 27 percent higher compared to earnings for the same period last year, on sustained growth in recurring income, coupled with trading profits.
The income contribution of PETNET, the other financial services company, also increased by 207 percent year-on-year to P4.4 million.
Food subsidiaries Pilmico Foods Corporation, Pilmico Animal Nutrition Corporation and Pilmico International Pte Ltd. posted a 25 percent year-on-year decline in income contribution to P292 million due to a drop in the local feeds and flour business. The slump was traced to lower selling prices alongside higher raw material and operating costs.
Meanwhile, property arm Aboitiz Land Inc. registered a net income of P72 million, 46 percent higher than last year’s level. This was due to higher revenues from the industrial estate business coupled with improved sales and construction progress by the residential segment.
From the infrastructure group, income contribution from cement business Republic Cement and Building Materials Inc. decreased by 48 percent year-on- year to P202 million. This unit reported cement demand slowdown in the first quarter of 2017, as compared to the same period last year when there was strong demand due to the election season.