AEV nets P2 billion for first quarter

CEBU, Philippines — The company recognized non-recurring losses of P262 million during the period, compared to the P334 million in non-recurring losses for the corresponding period in 2019. These were due to unrealized foreign exchange losses from the revaluation of dollar-denominated assets. Without these one-off losses, the company’s core net income for the first quarter of 2020 was P2.3 billion, a 41% decrease year-on-year (YoY).

AEV recorded consolidated earnings before interest, tax, depreciation and amortization (EBITDA) of P11.8 billion, which was 5% lower YoY.

“The strong showing of our banking and financial services and food units have helped shore up our operational performance, underscoring the resilience provided by a diversified portfolio. This same resilience will also help us face headwinds from Coronavirus Disease 2019 (COVID-19),” said Sabin M. Aboitiz, Aboitiz Equity Ventures, Inc. President and Chief Executive Officer.

Power accounted for 55% of the total income contributions from AEV’s strategic business units, followed by Banking & Financial Services (46%), Food (2%), Infrastructure (1%), and Real Estate (-4%), respectively.

“We will continue to look for opportunities to keep the country’s economy moving as we carefully evaluate our business strategy,” Aboitiz said.

Aboitiz Power Corporation’s (AboitizPower) net income contribution to AEV for the first quarter of 2020 decreased by 43% year-on-year YoY, to P1.6 billion from P2.8 billion. Its net income for the quarter was P2.1 billion, 43% lower YoY.

AboitizPower’s generation and retail supply business recorded EBITDA of P7.4 billion during the first quarter of 2020, 13% lower than the P8.6 billion recorded during the corresponding period last year. The variance was primarily due to the EBITDA for the first quarter of 2019 that included other income.

Excluding that, the company’s EBITDA would have been lower by only 3%. AboitizPower’s performance during the first quarter of 2020 was also affected by outages in TSI and GMCP, sand by lower selling prices. These offset the fresh contributions of Therma Visayas, Inc. (TVI) and the decreased purchased power costs.

Income contributions from the generation and retail electricity supply businesses, which accounted for 65% of total income from AboitizPower’s business segments, totaled P1.9 billion, 44% lower YoY. Its distribution business recorded an income share of P1 billion, an 8% increase YoY.

Union Bank of the Philippines’ income contribution to AEV amounted to P1.3 billion, 23% higher than the P1.1 billion recorded in the same period last year.

Union Bank and its subsidiaries recorded a net income of P2.6 billion in the first quarter of 2020, 22% higher than the P2.2 billion recorded in the same period last year. This was mainly due to revenue growth from the increase in net interest income, which grew to P6.8 billion, 47% higher YoY.

AEV’s non-listed food subsidiaries’ (Pilmico Foods Corporation, Pilmico Animal Nutrition Corporation, and Pilmico International Pte. Ltd. - which includes Gold Coin Management Holdings Limited) income contribution to AEV amounted to P60 million for the first quarter of 2020, 56% lower than the ?137 million recorded in the same period in 2019.

Pilmico International recorded net income of P297 million in the first quarter of 2020, a 116% increase from the same period last year. This was due to the increase in income contribution of Gold Coin Management Holdings Limited (Gold Coin) resulting from an increased equity ownership, and increased volumes from Gold Coin’s China, Vietnam, Malaysia, and Sri Lanka operations.

Gains from Pilmico International were outweighed by a net loss for Pilmico’s local subsidiaries.

AEV’s non-listed real estate businesses, comprising Aboitiz Land, Inc. and its subsidiaries, reported a consolidated net loss of P110 million for the first quarter of 2020 versus P44 million in losses recorded in the same period last year.

AboitizLand contributed P508 million in revenues for the first quarter of 2020, 24% lower than revenue contributions from the same period in 2019. This decrease was primarily due to higher forfeitures and lower construction progress resulting from the eruption of Taal Volcano and enhanced community quarantine (ECQ) due to COVID-19. Operating costs were also higher YoY.

For the Infrastructure group, Republic Cement & Building Materials, Inc.’s income contribution to AEV for the first quarter of 2020 amounted to P61 million, versus the P32 million loss recorded in the same period last year. This was due to strong demand growth during the first two months of the year and tempered by the slowdown in construction activities in March due to the Luzon-wide ECQ.