AEV H1 net income tops P10 billion, but 2 percent lower than in 2017

By Lenie Lectura – August 1, 2018
from Business Mirror

ABOITIZ Equity Ventures Inc. (AEV) said its net income for the first half of 2018 stood at P10.1 billion, 2 percent lower than the P10.3 billion recorded last year.

The company recognized nonrecurring losses during the period amounting to P467 million versus last year’s losses of P495 million, representing net foreign-exchange losses on the restatement of dollar-denominated net debt.

Power accounted for 68 percent of total income contributions, followed by banking and financial services (22 percent), food (6 percent), land (3 percent) and infrastructure (1 percent).

“Our first-half results reflect challenges that continue to test the resilience of our diversified portfolio,” said Erramon I. Aboitiz, AEV president and CEO.

Meanwhile, Aboitiz Power Corp. (AboitizPower) recorded a net income of P9.1 billion during the first six months of the year, 6 percent lower than the P9.7 billion recorded in the same period in 2017.

The company said this was mainly on account of a P1.4-billion nonrecurring loss recorded during the period as against last year’s losses of P744 million, coming from net foreign-exchange losses.

Without these one-off losses, the company’s core net income was flat year-on-year (YoY) at P10.5 billion.

“We continue to grow the business with the capacity additions and the expanding distribution business,” said Antonio Moraza, AboitizPower president and CEO.

“Energy sales are up; however, margins are getting tighter due to competition. This is a reality we have prepared for—and our organization is equipped to compete,” Moraza added.

Core net income of the company’s generation and retail-supply business for the first half of 2018 was P9.4 billion, 2 percent lower than last year’s. Due to foreign-exchange losses, the first half’s nonrecurring losses totaled P857 million, versus last year’s nonrecurring loss of P284 million. This brought the generation and retail-electricity supply net income contribution to P8.5 billion, which was 8 percent lower year-on-year.

Net-income contribution of the distribution business increased by 14 percent to P2.1 billion at end-June this year, from P1.8 billion in the same period a year ago.

The income contribution of Union Bank of the Philippines to AEV for the first half of 2018 increased by 9 percent YoY, from P2.1 billion to P2.3 billion. On a stand-alone basis, UnionBank and its subsidiaries posted a net income of P4.7 billion for the first half of 2018, up 9 percent, from the P4.3 billion earned in the same period last year.

Pilmico Foods Corp. and its subsidiaries reported a net income of P662 million for the first half of 2018, 8 percent lower than the P717 million recorded last year, due mostly to higher raw-material costs.

Aboitiz Land Inc. reported a net income of P283 million during the first half of 2018, 40 percent higher than the P202 million recorded last year. Revenues for the first half of 2018 totaled P2 billion, a 30-percent increase from the same period last year due primarily to the industrial business having recognized substantially more hectares sold during the first six months of 2018 compared to the same period last year.

Republic Cement and Building Materials Inc.’s income contribution to AEV for the first half of 2018 decreased 91 percent YoY, from P494 million to P44 million. Although prices grew modestly with demand remaining from the previous quarter, this was offset by increased fuel and power costs during the period.

“For the rest of the year, we remain confident in ably executing our focused strategy. We look forward to more opportunities, as well as the contributions of newly acquired businesses as we stay true to our purpose of driving change for a better world by advancing business and communities,” Aboitiz said.