AEV profit declined to P4.7 billion in Q1

Aboitiz Equity Ventures Inc. (AEV) ended the first quarter of 2017 with a P4.7-billion net income, representing a 7-percent fall from a year ago. 

The company recognized non-recurring losses of P442 million (versus last year’s gain of P186 million) coming from foreign exchange (forex) losses recognized upon revaluation of dollar-denominated liabilities and mark-to-market losses on derivatives.

Power accounted for 67 percent of the group’s total earnings while income contribution of the banking and financial services, food, infrastructure, and land strategic business units (SBUs) were at 22 percent, six percent, four percent and one percent, respectively.

Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) of P 12.7 billion, recording an increase of 14 percent year-on-year (YoY). Considering ITDA expenses, the higher income contributions from associates brought core net income for the quarter 5 percent higher YoY, from P4.9 billion to P5.1 billion.

“Our performance reflects the underlying strength of our core operating businesses as we continue to invest for the future. In pace with the country’s upward growth momentum, we will use our gains to create long-term value for all our stakeholders,” Erramon Aboitiz, AEV President and Chief Executive Officer, said.

Aboitiz Power Corp.’s (AboitizPower) income contribution to AEV decreased by 13 percent YoY, from P3.9 billion to P3.4 billion as income performance also recorded a 13 percent decline YoY at P4.4 billion.

Its power-generation business, which accounted for 81 percent of earnings contributions from AboitizPower’s business segments, reported a net income drop due to higher interest and depreciation expenses from the initial take-up of GNPower-Mariveles costs, and increase in unrealized foreign-exchange and mark-to-market losses.

For power distribution, attributable sales for the period was at 1,208 gigawatt-hours, remaining close to flat compared to the same period last year.

Union Bank of the Philippines’ (UnionBank) income contribution to AEV increased by 30 percent from a year ago, from P837 million to P1.1 billion.

Together with its subsidiaries, the SBU recorded a net income of P2.2 billion for the first quarter of 2017, 27 percent higher as compared to the P1.7 billion earned for the same period last year. The increase in net income was largely in view of the sustained growth in recurring income, coupled with trading profits.

Likewise, the income contribution of PETNET, the other financial services company, increased by 207 percent on year to P4.4 million.

AEV food subsidiaries’ (Pilmico Foods Corp., Pilmico Animal Nutrition Corp., and Pilmico International Pte Ltd.) income contribution for the quarter decreased by 25 percent from P389 million this year to P292 million.

Feeds Philippines and Flour reported a drop in net income contributions largely driven by lower selling prices and higher raw material (RM) and operating costs. Depressed flour prices, higher wheat cost, and increase in operating costs dragged Flour’s net income for the period to P87 million, 46 percent lower year-on-year.

Feeds Vietnam’s income doubled to P7 million driven by the 5 percent volume growth, a result of the expansion in new markets: export and commercial, and better margins. The recovery in live hog selling prices of Farms resulted to a 4x higher YoY net income of Farms division to P81 million.

Aboitiz Land Inc. (AboitizLand) registered a net income of P72 million, 46 percent higher than last year’s P50 million.

The increase in net income was mainly attributed to higher revenue recognition by the industrial BU, and improved sales and construction progress by the residential BU. AboitizLand posted a revenue of P640 million for the first quarter of 2017, an increase of 28 percent from the same period last year.

Of this revenue, the residential BU contributed 53 percent (P339 million), the industrial BU 41 percent (P264 million), and the commercial BU and others, 6 percent (P37 million).

From the infrastructure group, Republic Cement and Building Materials Inc.’s income contribution to AEV decreased by 48 percent YoY from P391 million to P202 million. Cement demand slowdown was experienced in the first quarter of 2017, as compared to the same period last year when there was strong demand due to the election season.

Aboitiz Equity Ventures Inc. (AEV) is the public holding company of the Aboitiz Group with major investments in power, banking and financial services, food, infrastructure, and land.

Today, AEV is recognized as one of the best-managed companies in the Philippines and in the region, consistently cited for its commitment to good corporate governance and corporate social responsibility.

With five generations of Aboitiz Group business success behind it, AEV continues to drive change for a better world by advancing business and communities.