Aboitiz Equity profit drops to P2.4B

Aboitiz Equity Ventures Inc., the listed investment holding firm of the Aboitiz family, reported a 6.3 percent drop in its net profit in the nine months ending September this year to P2.4 billion, from the restated net income in the same period in 2005.

In the third quarter, AEV’s net earnings likewise drop-ped 6.4 percent to P845 million.

AEV said its power business accounted for 69 percent of total income in the first nine months of the year. Combined, both distribution and generation utilities contributed P 1.83 billion, up 8.2 percent over the same period last year.

The power distribution group alone contributed P947 million or an increase of 27 percent. Despite low volume growth for the period, the distribution utilities registered significant earnings growth, due mainly to improved operating efficiencies. Power generation contributed P880 million, 6.5 percent lower mainly due to the lower results from Luzon Hydro Corp.

The banking sector, on the other hand, chipped in P721 million to AEV, down by 8.8 percent.

Union Bank’s earnings were lower due to integration costs related to its merger with International Exchange Bank, which it acquired in May this year. Lower interest margins also contributed to the earnings decline.

The food group contributed P350 million, a 12.4 percent improvement over its performance in the first nine months last year. This was attributed to improved margins in its flour business. The swine farm is currently going through an expansion program at its Tarlac facility to cope with growing demand.

The transport group, on the other hand, contributed a net loss of P275 million in the January to September period this year, a reversal of the P32 million profit reported in the same period last year. The high cost of fuel was the main reason for the negative results and the recent decline in fuel prices will be felt in the last quarter of the year.

During the period under review, earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to P4.7 billion, lower by 8.3 percent from the year ago level.