Power business fuels Aboitiz Equity profit

MANILA, Philippines  – The Aboitiz family conglomerate saw stable profit of P23.5 billion in 2023 as gains at most business segments offset softer earnings at its banking business, which recorded a sharp increase in credit loss expenses as interest rates surged.

Aboitiz Equity Ventures (AEV) saw full-year profit slip by 2 percent while core earnings rose 8 percent to P22.1 billion with the removal of nonrecurring gains recorded in 2022.

“Building on our resilience and steady core performance, we are ready for another exciting phase of growth and innovation,” AEV president and CEO Sabin Aboitiz said in a stock exchange filing on Tuesday.

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He also underscored new big-ticket investments such as the acquisition of a 40-percent stake in Coca Cola Philippines and the investment in gas-fired power plants of tycoon Ramon Ang’s San Miguel Corp.

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“[T]he recently announced investment of AboitizPower in gas projects with Metro Pacific Investments Corp. and San Miguel Global Power diversifies our energy mix as we transition to cleaner energy. We are confident that 2024 will be a transformative year for AEV and its business units,” Aboitiz said.

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AEV said the bulk of earnings had come from power (67 percent), followed by financial services at 18 percent. Infrastructure, food and real estate contributed 6 percent, 5 percent, 4 percent, respectively.

Aboitiz Power Corp. reported higher earnings in 2023, pushing up AEV contributions by 28 percent to P17.3 billion.

Banking profit contribution

Union Bank of the Philippines saw profit contributions fall 29 percent to P4.5 billion amid higher costs. Net interest income hit P52 billion, a gain of 34 percent, while fee-based earnings jumped 54 percent to P10.4 billion during the past year.

Those gains were partly offset by credit provision losses of P14 billion, which surged more than three times from P4.1 billion in 2022, on top of a 43 percent jump in operating costs.

Infrastructure alone contributed P2.4 billion, a 26 percent increase, after the group assumed operations of the Mactan Cebu International Airport and land and lease sales from its economic estates. INQ