Aboitiz holding firm posts 17% profit growth in Q1

MANILA, Philippines - Holding firm Aboitiz Equity Ventures Inc. (AEV) recorded double-digit earnings growth in the first quarter, another blue chip stock posting healthy income gain amid a robust economy.

A one-time gain from the sale of its thrift bank offset lower income from the power business, the company said.

In a regulatory filing, AEV said its consolidated net income hit P6.8 billion in the first three months, up 17 percent from a year ago, translating to an earnings per share of P1.24.

Core income, which strips off non-recurring gains or losses, inched up 1.3 percent to P5.5 billion.

The power business accounted for 62.1 percent of total earnings, followed by banking, food and property at 31.5 percent, 5.7 percent, and 0.7 percent, respectively.

The power generation and distribution business recorded an 18-percent drop in income contribution to P3.5 billion from P4.3 billion a year ago.

Specifically, the power generation business reduced its earnings contribution by 22 percent to P3.1 billion due to the drop in ancillary volumes and lower selling prices in the Wholesale Electricity Spot Market and bilateral contracts.

Aboitiz Power Corp.’s net generation was flat at 2,450 gigawatt-hours in the first quarter.

The power distribution group’s income contribution rose two percent to P576 million on higher electricity sales from the residential and commercial segments.

“In spite of the slight drop in profits in our power business this quarter, the growth trajectory and long term strategy of building new power plants across the Philippines remains on track,” said AEV president and CEO Erramon Aboitiz.

Aboitiz said the company is focused on adding 1,850 megawatts of generating capacity in the next five years that will require P190 billion in capital expenditures.

“The stellar performances of the banking and food businesses made up for the drop in earnings of the power business,” Aboitiz said.

The banking business, for its part, posted a 35-percent income growth to P1.8 billion.

“This was driven by hefty trading gains and a sharp increase in income from subsidiaries,” AEV said.

Net interest income jumped 16 percent to P2 billion amid sustained improvement in net interest margins given the expansion in average loan portfolio.

The holding firm also booked a P1.27-billion gain from the sale of City Savings Bank Inc. to subsidiary Union Bank of the Philippines in January.

Income contribution of subsidiary Pilmico Foods Corp. climbed nearly half in the first quarter.

The farms division turned around to a P56.5-million income from a net loss of P16.4 million a year ago due to an improvement in the average selling price of market hogs.

The flour and feeds business grew its sales volume by two percent and 13 percent, respectively.

Lastly, newly-acquired unit AboitizLand Inc. contributed P43.1 million to AEV’s income as revenues hit P258 million.

“AboitizLand plans to spend P1 billion over the year for the construction of various projects,” AEV said.

Late last month, AboitizLand agreed in principle with real estate giant Ayala Land Inc. to enter into a 50-50 joint venture for the development of properties in Cebu.