The power and banking businesses of the Aboitiz Group dragged down the parent company’s net profits for the first half of the year, the group said.
In two separate disclosures, parent firm Aboitiz Equities Ventures Inc. (AEV) and its power unit Aboitiz Power Corp. said the power and banking businesses lowered the financial performance of the Aboitiz Group for the first six months of the year.
AEV’s net income for the first semester declined 20 percent to P9.5 billion from P11.9 billion, while it also decreased by 9 percent to P4.6 billion for the second quarter alone.
AEV’s power unit Aboitiz Power, individually recorded a 6 percent decline for the first semester to P8.9 billion from last year’s P9.5 billion. First half core net income was also down 21 percent to P8.6 billion compared to last year.
The decrease was mainly due to costs of ongoing projects, as well as the “implementation of the Geothermal Resources Sales Contract for the Tiwi-Makban plants and weaker ancillary performance of Magat plant,” according to Aboitiz Power’s disclosure.
In addition to ongoing works for the 14-megawatt (MW) Sabangan run-of-river hydro plant and 300-MW Davao coal plant, Aboitiz Power also expects to begin construction of its 400-MW Pagbilao expansion, 300 MW Cebu Coal, and 68 MW Manolo Fortich projects within the next few months, AEV said in its first half report.
Aboitiz banking arm Union Bank of the Philippines Inc. also saw lower first half net income, down 48 percent to P3.173 billion from P6.191 billion last year.
For its other subsidiaries, AEV’s non-listed food arm Pilmico Foods Corp. increased its profit contributions by 3 percent to P647.8 million from P630.7 million, while real estate developer Aboitiz Land Inc. significantly increased its income contributions by 63 percent to P181.3 million from 2013’s P111.1 million due to higher sales in both the food and real estate businesses.
Team Orion—which consisted of Aboitiz Land and Ayala Corp. unit AC Infrastructure Holdings Corp.—is now seeking the dismissal of the appeal of San Miguel Corporation’s Optimal Infrastructure Development Inc. to the President in bidding for the Cavite-Laguna Expressway (Calax) Project. The Aboitiz-Ayala consortium had submitted the highest bid of P11.659 billion for the Calax project, which was contested by the San Miguel-led developer after Optimal Infrastructure’s bid was disqualified.
Incorporated in 1989, AEV is the holding company of the Aboitiz Group of Companies, having businesses in power distribution, power generation, and retail electricity supply (Aboitiz Power); financial services and portfolio investments (Union Bank); food manufacturing (Pilmico Foods); and real estate (Aboitiz Land).