Aboitiz Equity Ventures Inc. (AEV), the holding firm of the Aboitiz family, suffered a 36.7-percent decline in its first quarter net income due to lower sales in its power, banking and real estate business segments.
AEV said in a disclosure to the stock exchange its consolidated net income fell to P4.1 billion from P6.09 billion in the same period in 2014, and its core income dropped 7 percent to P0.74 earnings per share.
Its power business contributed 79 percent to its income, while the banking, food and property segments took up 9 percent, 10 percent and 2 percent of the total net income, respectively.
AEV’s power generation company, Aboitiz Power Corp. (AboitizPower) recorded a 4 percent improvement in its net income to P3.3 billion from P3.2 billion. But its core net income dropped 6 percent to P2.7 billion from P2.9 billion a year ago.
The dip in AboitizPower’s core net income was due to the lower sales of its Tiwi-Makban plants because of the decline in steam flow; the lower average prices as a result of the implementation of Binga plant’s new ancillary services in February 2014; and the aftermath of the expiration of Magat plant’s income tax holiday, which took effect in July last year.
AEV President and Chairman Erramon Aboitiz said the company is looking for new opportunities locally and internationally as part of efforts to achieve additional capacity of 2,000 megawatts (MW) in the next five years.
“We are looking at expanding the power business to select international markets through new projects and acquisitions. We are also relentlessly exploring new sources of renewable energy to provide the country with the right mix of energy sources,” Aboitiz said.
“We recently partnered with United States-based SunEdison to explore the development of up to 300 MW of utility-scale solar photovoltaic power generation projects in the Philippines over the next three years,” he said.
In the banking segment, Union Bank of the Philippines recorded a 48-percent slump in its net income to P382 million from P730.6 million in the first three months last year due to lower trading gains and foreign exchange losses.
Union Bank’s net interest income was flat at P2.5 billion, total other incomes dropped by 37 percent to P1.1 billion, and total operating expenses also stood at P2.3 billion.
For the property segment, Aboitiz Land Inc. had a 34-percent decline in its core net income at P80.3 million from P121.1 million due to the sale of Lima Utilities to AboitizPower, reducing Lima Utilities’ revenue contribution.
But AEV’s food business, Pilmico Foods Corp., booked P415.7-million profits, which is 23 percent higher than the P338.6 million last year due to the strong feeds sales in Philippines and Vietnam, offsetting the decline in farm and flour businesses.
“Flour sales dropped due to the increase in the cost of raw materials, while farm sales were also hurt by an oversupply of hogs,” the company said in the disclosure.
This year, Aboitiz said that the group remains bullish about its long-term growth prospects.
“We continue our growth story as the group pursues its expansion both organically and through acquisition opportunities both here and abroad,” Aboitiz said.
“We have also added infrastructure and infrastructure-related businesses as our fifth business leg, and recently we signed an agreement to design, build, and operate the country’s largest private bulk water supply project in Davao,” he said.
Aboitiz was referring to its joint venture firm Apo Agua Infrastructura Inc., which signed a P10-billion supply deal of 300 million liters per day of treated bulk water with the Davao City Water District (DCWD) to provide clean water in the area.
The company planned to raise P25 billion fresh funds from a bond sale in the second half of the year to finance its infrastructure, transport and utilities-related projects.
The company has joined the bidding for P123-billion Laguna Lakeshore Expressway Dike project under the Team Trident or Trident Infrastructure and Development Corp., a consortium of quad-partnership of AEV, Ayala Land Inc., SM Prime Holdings Inc., and Megaworld Corp.
It is also considering submitting a bid for the Light Rail Transit 2 operation and maintenance project.
The company is studying various public and private partnership (PPP) projects, which consist of bundled airport projects including the P20.26-billion Bacolod-Silay Airport and P30.40-billion Iloilo Airport; the P2.34 -billion New Bohol Panglao Airport; P14.62-billion Laguindingan Airport; and the P40.57-billion Davao Airport.
Incorporated in 1989, AEV is involved in power distribution, power generation and retail of electricity supply (AboitizPower); financial services and portfolio investments (UnionBank); food manufacturing (Pilmico Foods); and real estate (AboitizLand).