Aboitiz Equity hikes earnings by 40% to P1.72B in first semester

Aboitiz Equity Ventures Inc., (AEV) the listed investment holding company of the Aboitiz family, posted a net income of P1.72 billion in the first six months of the year, up 40 percent from the same period in 2004.

In a financial report filed with securities regulators, AEV said the net profit is equivalent to earnings per share of 36 centavos.

AEV’s EBITDA (earnings before interest, taxes, depreciation and amortization) improved by 21 percent to P3.39 billion with the continued strong performance of its power and banking units.

The power group pumped in P1.03 billion in net income or an increase of 86 percent from the year ago level. This represents 52 percent of total contributions from AEV’s business segments.

AEV’s distribution utilities contributed P573 million to the group’s net income, 51 percent higher than the year earlier figure. Taking into account its share in the company, the combined gigawatt-hour (gwh) sales of the distribution utilities went up four percent to 1,228 gwhrs.

All of AEV’s distribution utilities registered significant earnings growth due mainly to higher margins and increased operating efficiencies.

AEV’s generation companies, on the other hand, posted a combined net income of P453 million in the first half, an improvement of 164 percent from the previous level. Both the supplemental water project of Luzon Hydro and the newly-acquired Talomo mini-hydro facility started operations in the first half.

AEV’s banking subsidiaries pumped in P569 million in net income or an increase of 49 percent from the same period last year, representing 29 percent of total income contributions from AEV’s business groups.

Union Bank reported a 50 percent growth in its first half net income to P563 milion, mainly due to increased returns from its capital markets business, cash management services, consumer finance and asset recovery.

AEV’s transport subsidiaries, on the other hand, reported a 54 percent drop in earnings to P153 million, representing eight percent of the group’s total income. Both passage and freight volume declined five percent and six percent, respectively.

Aboitiz Transport System Corp. increased its passage rates by two percent and rate per TEU by three percent. These adjustments, however, were not sufficient to cover the increased operating costs, especially for fuel. ATS is taking positive measures to mitigate these by improving efficiency. It will continue to increase its rates to cover increases in operating costs.

The contribution from AEV’s food manufacturing company Pilmico Foods Corp. remained relatively flat at P211 million due to lower sales volume and higher operating costs.