AEV boosts earnings 24% in Q1

MANILA, Philippines - Aboitiz Equity Ventures Inc. (AEV) reported a 24 percent increase in its first quarter net income to P5 billion, buoyed by higher contributions from its power, banking and financial services, and infrastructure business units.

Power continued to account for bulk of earnings, with a 70 percent share followed by banking and financial services (15 percent), food (seven percent), infrastructure  (seven percent), and real estate with one percent.

AEV’s core net income stood at P4.9 billion, 19 percent higher year-on-year, AEV said in a regulatory filing yesterday.

 Erramon Aboitiz, president and CEO of AEV, said the group’s cement business  is on track to becoming a fifth leg for the company.

“We expect strong growth in cement and the full-year recognition of income from Republic Cement to positively impact AEV’s earnings this year,” he said.

Aboitiz Power Corp. contributed P3.9 billion to  groupwide income, up 15 percent year on year. Net earnings also grew 15 percent to P5 billion. Core net income amounted to P4.8 billion or an increase of 10 percent.

The growth was driven by the 12 percent increase in capacity sales to 2,014 megawatts (MW) owing to additional capacities from Therma South Inc. and higher available capacities from SN Aboitiz Power (SNAP) Group’s hydropower plants.

For power distribution, AboitizPower’s attributable electricity rose eight percent to 1,201 gigawatt-hours (gwh), driven by higher electricity sales across all customer segments.

AEV’s banking arm, Union Bank of the Philippines (UnionBank) and its subsidiaries posted P837 million in income or more than double last year’s contribution.

On the other hand, AEV’s non-listed food subsidiaries (Pilmico Foods Corp., Pilmico Animal Nutrition Corp., and Pilmico International Pte Ltd.) posted a six percent decline in income contribution to P389 million.

“Feeds Philippines’ bottomline improved by 39 percent to P203 million due to strong volume and lower raw material prices while Feeds Vietnam, Flour, and Farms all reported a drop in income contributions, largely driven by lower prevailing selling prices,” AEV said.

The emerging fifth business segment, AEV’s infrastructure company, Republic Cement and Building Materials Inc. , started contributing mid-September last year, pumping in P391 million in income.

Republic Cement had a strong first quarter performance due to strong demand, which was supported by strong foreign direct investments in the business process outsourcing sector.