LISTED Aboitiz Equity Ventures Inc. (AEV), the investment holding company of the Aboitiz Group, said Wednesday its net income dipped by 4 percent last year due to one-time losses arising from the market revaluation of its dollar-denominated power business.
In a statement, the company said consolidated net income fell 4 percent to P17.7 billion in 2015 from P18.4 billion in 2014, resulting in earnings per share of P3.18.
The marginal decline was attributed to a non-recurring loss of P602 million versus a gain of P436 million recorded in 2014 from revaluation of its power business unit’s consolidated dollar-denominated assets and liabilities.
Core net income, or income derived from its main operations, inched up by 2 percent to P18.3 billion.
Aboitiz Power Corp. (AboitizPower), which accounts for 73 percent of the firm’s business, contributed P13.5 billion to AEV’s income, 6 percent higher than its contribution in 2014.
AboitizPower posted a 5 percent increase in net income to P17.6 billion in 2015, or earnings per share of P2.39.
Adjusting for its non-recurring mark-to-market losses of P762 million versus the previous year’s loss of P136 million, the core net income of AEV’s power business amounted to P18.4 billion in 2015, up 9 percent year-on-year.
AEV’s banking unit Union Bank of the Philippines, which accounts for 14 percent of its business, contributed P2.5 billion to earnings. This is 22 percent lower than the earnings contribution in 2014 primarily because of the absence of trading gains.
Growth in recurring net income, or income derived from its main operations, slightly offset the absence of trading gains, resulting in 2015 earnings of P5.3 billion for Union Bank, 22 percent lower than the P6.8 billion posted the previous year. This translates to a return on average equity and return on average assets of 10.2 percent and 1.2 percent, respectively.
As of end-December 2015, UnionBank’s total resources were steady at P433.3 billion as the bank re-balanced its asset portfolio by growing customer businesses and rationalizing liquid assets funded by high cost deposits.
Loans increased 29 percent to P179.6 billion while investment securities, which are mostly at amortized cost, increased 26 percent to P101.6 billion.
“The Bank’s capitalization remained more than adequate to support the growth of its business segment, with a capital adequacy ratio of 16.2 percent,” the company said.
AEV’s newly-acquired company, Petnet, Inc., only began contributing in June of last year and posted income contribution of P8.2 million for the period in review.
AEV’s non-listed food subsidiaries (Pilmico Foods Corporation, Pilmico Animal Nutrition Corporation and Pilmico International Pte Ltd.), which account for 9 percent of its business, recorded 31 percent growth in 2015 net income after taxes to P1.7 billion, up P400 million from the previous year.
Real estate subsidiary Aboitiz Land, Inc. (AboitizLand), which accounts for 3 percent of AEV’s business, posted a 15 percent decline in earnings contribution to AEV from P633 million to P536 million in 2015.
Newly acquired company Republic Cement and Building Materials, Inc. (Republic), which accounts for one percent of its business, only started contributing in mid-September of the year and posted an income contribution of P194.4 million for the period in review.
“The income contributions from our infrastructure and offshore food businesses affirm our growth strategy to diversify our earnings base through our fifth business leg, infrastructure, as well as gradually expand overseas, not just locally,” Erramon Aboitiz, AEV president and chief executive officer, said.
“We will continue to pursue selective PPP [public-private partnership] leads as the government opens up unique opportunities in key infrastructure segments. We expect to invest time and resources in finding the right local and international partners that can provide the market and technical know-how, in addition to our local market knowledge and industrial expertise,” Aboitiz added.