Aboitiz group incurs 17% profit fall in 3 quarters

By Riza Lozada 

Flagship company Aboitiz Equity Ventures Inc. (AEV) reported a consolidated net income of P11.9 billion until September, 17 percent lower from a year ago, with non-listed food subsidiary Pilmico Foods Corp. (Pilmico) as a bright spot, growing by 46 percent and contributing P1.4 billion in income.

AEV will pursue strategic growth plans with its recent foray into infrastructure through Lafarge Republic Inc., allowing robust growth expectations in that sector, AEV President and Chief Executive Officer Erramon Aboitiz said.

“We believe progressive infrastructure is what will propel our country’s economic growth and what will ultimately lead to a better life for our fellow Filipinos,” he said.

Overseas, we remain on the lookout for growth opportunities that fit into our investment parameters, ensuring that will deliver value to our stakeholders,” he added.

AEV’s net income of P11.9 billion as of September translated to P2.14 in earnings per share.

AEV’s power generation unit, Aboitiz Power Corp. (AboitizPower), contributed P9.4 billion in total profit, reflecting a 7-percent fall from the previous year’s P10.1 billion.

Net generation improved from 8,395 gigawatt hour (GWh) to 9,161 GWh, with bilateral contracts accounting for 90 percent of total energy sold during the period.

“Higher sales through bilateral contracts and ancillary services resulted in a 5-percent year-on-year increase in AboitizPower’s attributable sales from 1,782 megawatts (MW) to 1,866 MW,” AEV stated.

AboitizPower reported that improving water levels boosted ancillary sales by 38 percent, as well as the expansion of Unit 1 of Davao Coal, commercially operating since September 18, and Unit 2, expecting commissioning by 2016.

Construction has also commenced for the company’s 59-MW Negros Solar Energy Project.AboitizPower will be developing a 55 MW geothermal plant with PT Medco Power Indonesia and a potential 127-MW hydropower-generation project with SN Power AS and PT Energi Infranusantara, along the Lariang River in Central Sulawesi, Indonesia.

SN Aboitiz Power-Magat Inc. also signed a memorandum of agreement with the National Irrigation Administration (NIA) for the construction of an 8.5-MW hydroelectric power plant along the Maris Main (South) Canal in Magat.

The power distribution group’s earnings share for the first nine months of 2015 increased by 6 percent to P2 billion. Spearheaded by a 9-percent growth in industrial sales, total attributable electricity sales increased by seven percent on year from 3,299 GWh to 3,546 GWh.

The group’s gross margin during the period, however, decreased by 3 percent from P1.68 per kWh last year to P1.64 per kWh. The drop mostly came from Davao Light and Power Co. Inc., which incurred a higher direct cost due to the lag in the recovery of pass-through charges and the additional cost for running its embedded plant during the period.

The income contributions of AEV’s banking arm, Union Bank of the Philippines (UnionBank), from January to September recorded a 40-percent decrease from P2.4 billion to P1.4 billion. The decline was essentially due to trading losses, coupled with the increase in operating expenses. This performance translated to annualized return on average equity of 7.9 percent and return on average assets of 1.1 percent.

By end-September, net interest income grew by 8 percent to P8.6 billion, boosted by higher interest income on loans and other receivables coupled with relatively flat funding cost.

Total other income, meanwhile, slid by 22 percent to P4.6 billion, due to trading losses amounting to P200 million, as compared with P1.7-billion trading gains posted in the same period last year.

Pilmico recorded a stellar growth of 46 pecent year-on-year in the first nine months.