Aboitiz nets P14 billion in 9 months

Screengrab from www.aboitiz.com

MANILA, Philippines — Aboitiz Equity Ventures Inc. grew its third quarter net profit by 3 percent year-on-year to P4.8 billion, aided by improved earnings from the banking business.

For the first nine months of the year, AEV’s consolidated net income declined by 14 percent year-on-year to P14.3 billion due to the decline in contribution from the flagship power business as well as sluggish banking earnings for the first semester.

For the three-month period in review, AEV registered a non-recurring loss of P406 million, mainly due to the revaluation of the power unit’s consolidated dollar-denominated liabilities and placements. Adjusting for these one-offs, AEV closed the quarter with a core net income of P5.2 billion, higher by 9 percent year-on-year.

The year-on-year decline in the nine-month earnings was mostly due to lower earnings from flagship Aboitiz Power Corp., which contributed P10.1 billion or down by 8 percent from the level in the same period last year.

When adjusted for non-recurring items, the power unit recorded a 15 percent year-on-year decline in its earnings share to P10.3 billion.

Aboitiz Power’s generation group registered an 11 percent year-on-year decline in its income contribution to P8.3 billion. This was attributed to the full-year impact of the implementation of the Geothermal Resource Supply Contract of the Tiwi-Makban plants, limited operations of Magat plant due to low water levels, and the expiration of the Pagbilao plant’s income tax holiday starting January 2014.

For the nine-month period, power accounted for 72 percent of total business, followed by the banking, food and real estate units with income contributions of 17 percent, 7 percent, and 4 percent, respectively.

On non-recurring items for the period, AEV incurred a non-recurring gain of P380 million from the revaluation of dollar-denominated liabilities and placements and a one-off gain of P634 million from the sale of a couple of investments. In addition, the power unit booked a non-recurring cost for the acquisition of Lima Enerzone Corp. (formerly Lima Utilities Corp.).

Adjusting for these one-off’s, AEV’s nine-month core or recurring net income amounted to P13.9 billion, 16 percent lower than last year.

Meanwhile, other units contribution in the first nine months year-on-year were as follows: banking unit Union Bank’s income contribution declined by 28 percent year-on-year to P2.4 billion due to sluggish trading gains in the first six months; food unit, Pilmico Foods Corp. recorded a modest 1 percent year-on-year increase in income contribution to P942.2 million due to the weak performance of the feeds division, in turn as a result of the decline in margins and expiration of the income tax holiday of Iligan Feedmill; property unit Aboitiz Land Inc. grew income contribution by 247 percent to P565.4 million as revenues breached the P2 billion mark for the first time, almost triple from the same period last year. Industrial revenues were up by 473 percent year-on-year mainly from the contribution of Lima Land Inc. in Batangas.

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