Aboitiz Equity Ventures Inc. nets P3.5B in Q1 2019

MANILA, Philippines — Conglomerate Aboitiz Equity Ventures Inc. (AEV) posted a 27-percent year-on-year drop in first quarter net profit to P3.5 billion due to slower earnings contributed by its power, banking, and food businesses.

Excluding non-recurring losses of P334 million during the period, primarily due to unrealized foreign exchange losses from the revaluation of dollar-denominated assets and recognized losses on hedging instruments, AEV’s core net income was P3.9 billion, down by 27 percent year-on-year.

Power accounted for 71 percent of the total income contributions while the financial services, food and income contributions were at 27 percent and 4 percent. The real estate and infrastructure units incurred losses.

On a stand-alone basis, AboitizPower’s core net income for the first quarter of 2019 was P4.1 billion, down by 21 percent year-on-year. Taking into account non-recurring losses of P440 million for the same period, net income was P3.6 billion, 9 percent lower compared to the same period last year.

Income contributions from the generation and retail electricity supply businesses declined by 12 percent year-on-year to P3.4 billion during the first quarter. Higher volume and cost of purchased power due to exceptionally high spot market prices gnawed on cash flow. The company had purchased replacement power as a result of outages and over-contracting in anticipation of incoming capacities.

AboitizPower’s net income contribution to AEV during the first quarter decreased by 9 percent year-on-year to P2.8 billion.

The income contribution of Union Bank of the Philippines declined by 25 percent to P1.1 billion. On a stand-alone basis, UnionBank and its subsidiaries recorded a net income of P2.2 billion in the first quarter, down by 26 percent year-on-year, mostly due to non-recurring items that boosted earnings in the comparative year.

Non-listed food subsidiaries – Pilmico Foods Corp., Pilmico Animal Nutrition Corp. and Pilmico International Pte. Ltd., which now includes Gold Coin Management Holdings Ltd. – reported a consolidated net income of P137 million for the first quarter, a 48 percent decrease year-on-year.

AEV’s non-listed real estate segment, comprising AboitizLand nd its subsidiaries, reported a consolidated net loss of P44 million in the first quarter, 174 percent lower than the net loss in the same period last year.  The losses were due to the deferred revenue recognition of industrial lot sales combined with higher direct project expenses.

For the Infrastructure group, Republic Cement & Building Materials incurred a net loss of P32 million, 61 percent lower than net loss reported in the same period in 2018. This was mainly due to improved control on production costs in addition to stable market prices and private sector demand.