AboitizPower posts Php 8.9 billion net income in the first half of 2014
Aboitiz Power Corporation’s net income in the first half of the year slipped by six percent to Php 8.9 bn from Php 9.5 bn year-on-year. The revaluation of consolidated dollar-denominated loans and placements resulted to a non-recurring gain of P323 million (versus last year’s loss of P1,280 mn). This translated to earnings per share of P1.22. Adjusting for this one-off, the Company’s core net income for the first semester of 2014 amounted to P8.6 bn, down by 21% from a core net income of Php 10.9 bn in the same period last year.
“The dip in AboitizPower’s earnings does not affect our confidence in the power industry, as shown in our P80-billion capital expenditures this year. We remain firmly committed to meeting the country’s growing power requirements and offering competitive solutions to our customers,” said AboitizPower Chief Executive Officer Erramon Aboitiz.
The generation business accounted for 84% of earnings contributions from AboitizPower’s business segments, recording an income share of P7.6 bn for the first semester of 2014, down 6% YoY. Netting out one-off items, AboitizPower’s generation business amounted to P7.2 bn for the period, 23% lower than last year.
As of semester end, AboitizPower’s attributable net generation rose by 4% YoY, from 5,360 GWh to 5,556 GWh, as electricity sold through bilateral contracts expanded by 7% to 4,692 GWh. The improvement was mainly due to the higher contracted levels of the large hydros and Therma Mobile. On the other hand, spot market sales decreased by 13% from 996 GWh to 863 GWh as low water levels constrained the operations of the Magat, Ambuklao, and Binga plants.
In terms of capacity, higher sales through bilateral contracts and ancillary services resulted to a 21% YoY increase in AboitizPower’s attributable sales from 1,465 MW to 1,766 MW. However, ancillary sales have been weaker quarter on quarter as a result of the low water levels which begun in the second half of March.
“We are on track with making sure we increase our power capacity by an additional 2,000 MW over the next five years, amid the challenges of tightening supply. We just inaugurated the Tudaya hydropower plants in Davao del Sur last May 13, which will contribute 14 MW of net sellable capacity, while the 14 MW Sabangan hydro plant in Luzon and the 300 MW Therma South baseload plant in Davao will be completed early next next year. Construction of the 69-MW Manolo Fortich hydro plant in Bukidnon has started, while the 300-MW Therma Visayas baseload plant in Cebu and the 420-MW Pagbilao 3 plant in Luzon will break ground later this year”, Aboitiz shared.
The power distribution group’s earnings share for the first semester of 2014 declined by 11%, from P1.6 bn to P1.4 bn. Spearheaded by a growth in industrial sales, total attributable electricity sales increased by 6% YoY, from 1,997 GWh to 2,122 GWh.
But income still dipped as the group’s gross margin declined by 8% YoY to 1.58 kWh. The unfavorable variance was brought about by the higher direct costs registered because of the lag in recovery of Visayan Electric Company Inc.’s (VECO) cost of purchased power and the additional costs incurred by Davao Light and Power Company Inc., and Cotabato Light and Power Company Inc., due to the running of their embedded plants to cover for the energy shortfall in the Mindanao grid.
During the period, AboitizPower acquired Lima Utilities Corporation, the electricity distribution utility of LiMA Technology Center located in Batangas, from Lima Land, Inc., a wholly-owned subsidiary of affiliate AboitizLand. The move is in line with the Group’s strategy of expanding its EnerZone brand.