Aboitiz Group posts P3.5-B net income in Q1

Aboitiz Group posts P3.5-B net income in Q1

- in Economy
By John Rey Saavedra, PNA

CEBU CITY — Aboitiz Equity Ventures (AEV) registered a consolidated net income of PHP3.5 billion for the first quarter of 2019, the company’s management disclosed in a statement on Friday.

Accordingly, this represents a 27 percent decrease from the PHP4.8 billion net income posted by the Aboitiz Group’s holding company during the same period last year.

AboitizPower, the largest of its units, “remains on track toward exceeding its 4,000-MW net attributable capacity target by 2020,” top management stated.

“For the relevant period, AEV recorded consolidated earnings before interest, tax, depreciation and amortization of PHP12.4 billion, 11 percent lower year on year than the PHP13.9 billion logged for the first quarter of 2018,” it was further revealed.

Management added that its power business has accounted for 71 percent of the total income contributions, followed by banking and financial services (27 percent), food (4 percent), infrastructure (-1 percent), and land (-1 percent).

“Despite challenges, our long-term fundamentals remain intact. Our growth platform has expanded to 10 other countries across the Asia Pacific, providing us natural listening posts for expansion opportunities,” said Erramon I. Aboitiz, AEV president and chief executive officer, in the same statement.

“Our economy continues to grow at a healthy rate, and that is great for us Filipinos, as well as all of us in business who are supplying the different consumers in the Philippines. We continue to invest in all of our units both here and abroad. We remain committed to our purpose of driving change for a better world by advancing business and communities,” the Aboitiz management said.

The net income contribution of AboitizPower for the first quarter has decreased by 9 percent to PHP2.8 billion from PHP3.1 billion in the same period last year.

On a stand-alone basis, and taking into account non-recurring losses of PHP440 million for the same period, net income was PHP3.6 billion or a decline of 9 percent, lower compared to the same period last year.

“Its core net income was lower primarily due to higher volume and cost of purchased power due to exceptionally high spot market prices. The company had purchased replacement power as a result of outages and over-contracting in anticipation of incoming capacities,” the statement read.

“The underlying causes of this decline have mostly been resolved,” it added.

UnionBank’s income contribution to the group has declined by 25 percent to PHP1.1 billion, from PHP1.4 billion.

UnionBank and its subsidiaries posted a net income of PHP2.2 billion in the first quarter of 2019, down by 26 percent fromthe PHP2.9 billion earned in the same period of 2018.

The bank’s recurring income improved year on year as net interest income and fee income increased to PHP4.7 billion and PHP530 million, respectively, from PHP4.6 billion and PHP313 million in the first quarter of the previous year.

AEV’s non-listed food subsidiaries – Pilmico Foods Corp., Pilmico Animal Nutrition Corp., and Pilmico International Pte. Ltd. (which now includes Gold Coin Management Holdings Ltd.) – reported a net income of PHP137 million for the first quarter of 2019, a 48 percent decrease from the PHP264 million recorded in the same period in 2018.

Accordingly, Pilmico’s decline was due to Feeds Philippines (down by 89 percent to PHP12 million), which was impacted by increased raw materials costs, and from Farms (down by 97 percent to PHP4 million), which was impacted by higher feed costs and lower selling prices of live hogs.

AboitizLand, the group’s non-listed real estate segment, and its subsidiaries, reported a consolidated net loss of PHP44 million in the first quarter of 2019, 174 percent lower than the PHP59 million recorded in the same period in 2018.

According to the statement, the decline was due to the deferred revenue recognition of industrial lot sales combined with higher direct project expenses.

The contribution of its infrastructure business unit, Republic Cement and Building Materials, Inc., was a net loss of PHP32 million, 61 percent lower than the PHP82 million net loss reported in the corresponding period in 2018.

Improved control on production costs, in addition to stable market prices and private sector demand, has been seen as the reason for the slide in the net loss. (PNA)

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