AEV Q2 net profit down 15% to P5.1 billion

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The second quarter consolidated earnings of Cebu-based conglomerate Aboitiz Equity Ventures Inc. (AEV) plummeted significantly by 15 percent to P5.1 billion on a much lower selling price of electricity.

However, during the first half of the year, the consolidated income of the group slightly increased by 1 percent year-on-year to P11.9 billion from P11.8 billion.

The company’s power unit accounts for 74 percent in total earnings contributions of the group’s business units, while the income contribution of its banking, food and real estate businesses were at 19 percent, 6 percent and 1 percent, respectively.

Aboitiz Power Corp. ended the semester with an income contribution of P7.3 billion, registering a 22-percent decrease from earning P9.4 billion in the same period last year.

According to the group, the average price of the company for its power decreased by 11 percent during the first half of 2013, due to a year-on-year decline in both the average selling price of electricity sold to the spot market and average selling price under bilateral contracts of 19 percent and 10 percent, respectively.

Also, power sales through bilateral contracts decreased by 3 percent to 4,365 gigawatt-hours. The decline has been partly due to the conversion of a number of the company’s expiring power supply agreements from energy-based contracts to capacity-based type contracts.

Its banking unit, Union Bank of the Philippines contributed almost P2.8 billion from P2 billion, driven mainly by the increases in both net interest and other income.

Net interest income climbed by 11 percent to P4.1 billion primarily due to the year-on-year expansion in the average level of earning assets, the group said.

Capital ratios of the bank remained strong, providing adequate headroom to support growth, with Tier 1 ratio and total capital adequacy ratio at 16.7 percent and 19.5 percent, respectively.

The conglomerate’s food unit, Pilmico Foods Corp., also registered a growth after its income for the period expanded by 21 percent to P630.7 million.

From its recently acquired Aboitiz Land Inc., the group gathered a consolidated net income contribution of P111.1 million during the first half of 2013. Total revenues of AboitizLand amounted to P612.5 million, 68 percent of which came from the residential segment.

The developer, according to AEV, is now planning to spend P1 billion over the year for the construction of various projects.

As of June 30, 2013, AEV’s consolidated assets amounted to P193.9 billion, 13 percent lower than the year-end 2012 level.

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