Conglomerate Aboitiz Equity Ventures Inc. (AEV) saw a 63-percent year-on-year drop in second-quarter net profit to P2 billion as most businesses—except for the food segment—were affected by the coronavirus pandemic-induced lockdown protocols.
This brought AEV’s net profit for the first semester to P4 billion, down by 55 percent compared to the previous year, AEV disclosed to the Philippine Stock Exchange on Tuesday.
“The current COVID-19 crisis continues to disrupt and impact our organization in different ways. Throughout this, we have given significant attention to our ability to adapt to changes and to prepare for uncertainties,” Aboitiz group president and chief executive officer Sabin Aboitiz said.
“For the rest of the year, our goal is unchanged: to remain resilient and for our business units to be in the best possible position when we emerge from this crisis, in order to support the country’s economic recovery. As One Aboitiz, we will continue to be one with the nation in its fight against COVID-19,” Aboitiz added.
Power accounted for 49 percent of the total income in the first half while the banking business accounted for 39 percent. Income contributions from food stood at 14 percent while the infrastructure and real estate businesses incurred net losses.
Flagship AboitizPower’s six-month net income amounted to P3.7 billion, down by 57 percent year-on-year as earnings from the generation and retail electricity supply businesses sharply declined. The enforcement of COVID-related community quarantines and forced power outages involving Pagbilao units 1-3, TSI Unit 2 and
GMCP Unit 2 gnawed on this segment.
The earnings decline of AboitizPower was partially mitigated by the reduction in purchased power costs in the first semester alongside revenues contributed by Therma Visayas and Therma Mobile, which were not fully online during the comparative period last year.
Meanwhile, AboitizPower’s distribution business recorded an income share of P1.7 billion during the first half, down by 7 percent year-on-year. This was driven by lower energy consumption from the commercial and industrial customer segments due to reduced activities during the lockdown period.
Banking arm Union Bank of the Philippines contributed P2.3 billion in net income to AEV for the first semester, 3 percent down year-on-year, as the bank put up larger provisions for credit losses that may arise from the economic slump caused by COVID-19.
AEV’s nonlisted food subsidiaries—Pilmico Foods Corp., Pilmico Animal Nutrition Corp. and Pilmico International Pte. Ltd., which includes Gold Coin Management Holdings Ltd.— contributed P795 million in six-month net income, 44 percent higher year-on-year.
The local farm business incurred a net loss of P501 million due to decreased selling prices and sales volume resulting from the spread of the African swine fever in Luzon, as well as a decline in margins following higher farms and meat processing costs. However, the feeds business segment grew net income by 296 percent year-on-year to P448 million, due to lower raw materials and financing costs. The flour business segment also grew earnings contribution by 50 percent year-on-year to P346 million.
Income contribution from international subsidiaries grew by 205 percent year-on-year to P502 million, due to the increase in income contribution of Gold Coin resulting from an increased equity ownership, alongside increased volumes from Gold Coin’s China, Vietnam, Malaysia and Sri Lanka operations.
Meanwhile, Aboitiz Land and Republic Cement and Building Materials both turned unprofitable as a result of the lockdown protocols, contributing a net loss of P39 million and P10 million, respectively.
Aboitiz Land suffered from decreased residential revenues given the slowdown and restrictions in operations during the lockdown, given that percentage of completion required in the booking of revenues is driven by construction progress.
The cement business was affected by the dramatic slowdown in construction activities during the lockdown period. INQ