AEV Reports Php 4.1 bn Core Net Income in the First Quarter of 2015

Aboitiz Equity Ventures reports first quarter income of Php 4.1 billion

Aboitiz Equity Ventures ended the first quarter of 2015 with a core net income of Php 4.1 billion, 7% lower from the same period last year. This translates to earnings per share of Php 0.74 .

AboitizPower accounted for 79% of the income, while banking, food, and land contributed 9%,10%,and 2% respectively.

Power

AboitizPower contributed Php 3.3 billion in the first quarter, 4% higher than the previous year’s Php 3.2 billion. When adjusted for non-recurring items, the Power Unit’s earnings contribution dipped by 1% to Php 3.3 billion from Php 3.4 billion.

The generation unit’s income contribution was flat at Php 2.7 billion from a year ago. When adjusted for non-recurring items, core net income declined by 6% to Php 2.7 billion from the previous Php 2.9 billion. The drop is attributed to the lower sales registered by the Tiwi-Makban plants due to a decline in steam flow during the period as well as the implementation last February 2014 of the Binga plant’s new contract for ancillary services which resulted in lower average prices. The generation group’s income contribution was also affected by the expiration of the Magat plant’s income tax holiday which took effect last July 2014.

On the other hand, the power distribution group’s earnings contribution rose by 31% to Php 624.5 mn from Php475.4mn. The group’s attributable electricity sales for the quarter increased by 11% to 1,111 GWh from 1,000 GWh a year ago. The growth in sales was primarily driven by higher electricity sales across all customer segments, with residential, commercial, and industrial sales registering YoY growth of 7%, 5%, and 14% respectively.

While pursuing its goal to increase capacity by an additional 2,000 MW in the next five years, AboitizPower continues to look at new opportunities both locally and overseas.

“We are looking at expanding the power business to select international markets through new projects and acquisitions. We are also relentlessly exploring new sources of renewable energy to provide the country with the right mix of energy sources. As you know we recently partnered with United States-based SunEdison to explore the development of up to 300 MW of utility-scale solar photovoltaic power generation projects in the Philippines over the next three years,” said AEV’s President and CEO Erramon Aboitiz.

Banking

UnionBank’s first quarter income contribution decreased by 48% to Php 382 million from Php 730.6 million, due to lower trading gains and foreign exchange losses.

Net interest income was flat at Php 2.5 bn on high average costs of interest bearing liabilities, which more than offset the marginal growth in interest income. Total other income similarly dropped by 37% to Php 1.1 bn, largely in view of trading losses incurred this year as compared to the Php 422 mn trading gains in the same period a year ago. Meanwhile total operating expenses were maintained at Php 2.3 bn despite the bank’s continuous branch expansion particularly in Luzon.

Food

On the other hand, food subsidiary Pilmico posted a 23% rise in first quarter income contribution to Php 415.7 million from Php 338.6 million. The growth was propelled by the remarkable performance of Feeds Philippines and Feeds Vietnam which offset the decline in the income from the farm and flour businesses.

Flour sales dropped due to the increase in the cost of raw materials, while farm sales were also hurt by an oversupply of hogs.

Land

AboitizLand reported a 34% drop in core income contribution to Php 80.3 million from Php 121.1 million. Total revenue for the 1st quarter in 2015 showed a dip of 13% due to the sale of Lima Utilities to AboitizPower in 2014, to enable AboitizLand to focus on its core business. But excluding Lima Utilities’ revenue contribution, the land developer registered a 34% rise in its first quarter revenues in 2015 from the same period last year, backed by the progress across all business units. Majority of the growth is generated from the sale of industrial lots.

AEV’s President and CEO Erramon Aboitiz said that the Group remains bullish about its long-term growth prospects.

“We continue our growth story as the group pursues its expansion both organically and through acquisition opportunities both here and abroad. We have also added infrastructure and infrastructure-related businesses as our fifth business leg, and recently signed an agreement to design, build, and operate the country’s largest private bulk water supply project in Davao,” Aboitiz said.

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