AEV nets P15.9B

Conglomerate Aboitiz Equity Ventures Inc. saw a 7-percent year-on-year decline in nine-month net profit to P15.9 billion due to slower earnings from its banking, food and cement businesses alongside non-recurring foreign exchange losses.

AEV booked one-time foreign exchange losses of P1.2 billion – much larger than last year’s foreign exchange losses of P17 million – from the revaluation of dollar-denominated loans and pre-termination costs on refinancing. Without the one-off items, AEV’s core net income was flat at P17.1 billion versus last year’s level.

“In the first nine months of the year, we faced challenges that tested the resilience of our portfolio and showed the underlying strength of our core operating businesses. We remain optimistic on the long-term fundamentals of our businesses, and we look forward to continuing to advance business and communities in the execution of our growth strategy,” AEV president and chief executive officer Erramon Aboitiz said.

Flagship business Aboitiz Power (AP) grew its income contribution to AEV by 4 percent year-on-year to P12.1 billion as its net income for the period increased by 4 percent to P15.7 billion.

Income from power generation grew by 22 percent year-on-year to P14.2 billion, accounting for 80 percent of AP’s business. The distribution business, meanwhile, reported a P3 billion income share, or 4 percent higher versus the previous year.

UnionBank’s nine-month income contribution to AEV decreased by 21 percent year-on-year to P3.1 billion. On a stand-alone basis, the bank, together with its subsidiaries, recorded a net income of P6.4 billion, 22 percent lower year-on-year as the bank continued to recalibrate its business to grow lending and fee-based businesses.

Excluding securities trading, Union Bank’s core income for the nine-month period posted a year-on-year growth of 42.5 percent year-on-year to P6.1 billion.

Income contribution from PETNET, the group’s other financial services company, increased by 315 percent year-on-year to P20 million for the first three quarters.

AEV’s non-listed food subsidiaries – Pilmico Foods Corp., Pilmico Animal Nutrition Corp., and Pilmico International Pte Ltd. – reported a net income of P1.2 billion, 14 percent lower year-on-year.
Feeds Philippines and Flour reported a drop in net income contributions largely driven by lower margins and higher operating costs, while Feeds Vietnam and Farms saw incomes increase, driven by expansion in new markets, better margins, and improved selling prices of live hogs.

From the infrastructure group, Republic Cement’s income contribution to AEV shrunk by 80 percent year-on-year to P249 million. This unit reported cement demand slowdown in the first nine months versus last year, when there was strong demand due to the election season.

Property arm AboitizLand recorded a net income of P340 million, marking an increase of 128 percent year-on-year, attributable to higher revenues booked by the industrial business unit coupled with higher sales and notable construction progress by the residential business.