Aboitiz holding firm grows Q2 net profit by 11% to P5.6B

Conglomerate Aboitiz Equity Ventures Inc. grew its second-quarter net profit by 11 percent to P5.6 billion from a year ago, gaining from its power, banking and food businesses.

AEV ended the first semester with a consolidated net income of P10.2 billion, a decline of 9 percent from a year ago mostly due to the lower average selling price and net generation of power recorded for the period.

Excluding nonrecurring items, AEV’s core earnings for the first semester amounted to P9.7 billion, down 15 percent from a year ago, the company disclosed to the Philippine Stock Exchange.

For the second quarter, power accounted for 75 percent of earnings while the income share of the banking and food units stood at 18 percent and 7 percent, respectively.

Revaluation of consolidated dollar-denominated loans and placements resulted in a nonrecurring gain of P28 million for the three-month period against last year’s P428 million. In addition, an associate company of its power unit booked a one-off gain as it received cost reimbursements from National Power Corp. relating to its fuel importation. AEV’s share in this nonrecurring gain amounted to P137 million.

Adjusting for one-off items, AEV closed the second quarter ending June 30 with core profit of P5.4 billion, replicating last year’s level. This translated to P1.85 in earnings a share.

Flagship Aboitiz Power Corp. ended the semester with an income contribution of P8.1 billion, lower than last year’s P9.7 billion. When adjusted for nonrecurring items, the power unit recorded a 23-percent year-on-year reduction in earnings contribution from P9.8 billion to P7.6 billion.

Overall, the power generation business contributed P7.8 billion, recording a 20-percent drop from a year ago. The decline in the group’s bottomline performance was attributed to the lower average selling price and net generation recorded for the period.

As a group, Aboitiz Power’s generation business logged a 16-percent drop in average selling prices given the softening of the spot market prices compared with first semester 2010 levels.

AEV’s banking units recorded a 49-percent year-on-year improvement in earnings contribution from P964 million to P1.4 billion.

Union Bank ended the semester with an earnings contribution of P1.2 billion, up 36 percent from a year ago. Lower average yields, coupled with the decrease in the bank’s securities portfolio, resulted in a 20-percent year-on-year drop in the bank’s interest earnings on trading and investment securities. On the other hand, non-interest income for the period more than doubled to P4.5 billion from last year’s P2.2 billion on huge securities trading gains and higher premium revenues.

Unlisted thrift bank unit City Savings Bank contributed earnings of P211 million during the period, up 246 percent from a year ago. Coupled with the increase in AEV’s ownership in City Savings (from 39 percent to 99.3 percent), the higher earnings contribution was attributed to the 40-percent growth in the bank’s interest income on loans and service fees.

Finally, six-month income contribution from food unit Pilmico Foods Corp. (Pilmico) recorded a 25-percent decline to P650 million from a year ago as higher input costs affected profitability across business segments even as all recorded volume increased during the period. Except for the swine unit, average selling prices likewise registered improvements.