Dragged by losses incurred by its power unit, the third-quarter and nine-month consolidated net income of conglomerate Aboitiz Equity Ventures Inc. (AEV) dipped by 25 percent to P4.6 billion and 8 percent to P16.6 billion, respectively.
Out of the total earnings contributions from the AEV’s strategic business units (SBU), power accounted for 80 percent, while the income contribution of its banking, food and real estate business units were at 12 percent, 7 percent and 1 percent, respectively.
For the three-month period, the revaluation of consolidated dollar-denominated liabilities and placements of the company resulted in a nonrecurring loss of P119.7 million, which was partly offset by the reversal of a previous impairment provision amounting to P29.9 million related to the sale of a stake in an associate, as well as AEV’s share in its power unit’s one-time gain.
Adjusting for these, AEV closed the quarter with a core net income of P4.7 billion, down 25 percent year-on-year. On a year-to-date basis, AEV’s consolidated net income declined by 8 percent to P16.6 billion from P18 billion.
Union Bank of the Philippines, the company’s banking arm, contributed 8-percent growth to the group during the nine-month period, earning P3.3 billion from the P3.1 billion it earned last year. This was driven by higher interest income and other income as well as the increase of AEV’s stake in the bank.
Capital ratios of the bank also remained healthy with Tier 1 and total capital adequacy ratio at 18.6 percent and 19.7 percent, respectively.
AEV’s food unit, Pilmico Foods Corp., also recorded a 3-percent increase in its income contribution for the first nine months of 2013, earning P932.1 million from P906.2 million it recorded last year.
The growth was driven by the farms division of the company, which was driven by the improvement in the average selling price of market hogs.
Meanwhile, AboitizLand, the group’s real estate arm, posted a consolidated net income contribution of P162.8 million during the first nine months of 2013, while its total revenues amounted to P922.1 million, 68 percent of which came from the residential segment.
According to the group, AboitizLand’s capital expenditures for 2013 will likely exceed its target of P1 billion, which will be used for the construction of its various projects, as well as land acquisitions and other investment initiatives.
As for the company’s power business, Aboitiz Power Corp. recorded a 27-percent year-on-year decrease in its consolidated net income for the third quarter of 2013, from P6.2 billion to P4.8 billion.
According to the conglomerate, the movements in the peso-dollar exchange rate resulted to a P155.8 million non-recurring loss (versus last year’s gain of P219.6 million) from the revaluation of consolidated dollar-denominated liabilities and placements. On a year-to-date basis, AboitizPower’s bottomline performance recorded a 22-percent year-on-year decrease, from P18.4 billion to P14.3 billion.