AEV profit drops 9% in 9 months

Aboitiz Equity Ventures Inc. (AEV) reported a nine percent drop in net earnings as of the end of September to P15.7 billion as its power unit continued to struggle amid power supply issues.

AEV recognized non-recurring losses of P155 million from foreign exchange and derivative losses, albeit lower than the previous year’s P407 million.

Aboitiz Power Corp. accounted for 60 percent of the total income, followed by banking and financial services at 25 percent, food at six percent, land at five percent, and infrastructure four percent.

“Despite challenges in our power business, better operating performance in our non-power businesses provided resilience to our investment portfolio. As we fund our growth projects, we look to further broaden and strengthen our diversification in the Philippines and overseas,” AEV president and chief executive officer Erramon Aboitiz said.

AboitizPower’s income contribution amounted to P10.4 billion, 19 percent lower than the previous year as the firm faced headwinds from higher volume and cost of purchased power, lower spot market revenues, and lower plant availability.

AboitizPower said income from the generation and retail electricity supply businesses accounted for 80 percent of the total income, which dropped 18 percent to P12.6 billion.

“It has been a tough year for AboitizPower with the supply issues that resulted in the high cost of replacement power for our customers. The company has also generated lower revenues from the spot market due to challenges that caused some of our power plants to shut down,” AboitizPower chief operating officer Emmanuel Rubio said.

AEV’s banking arm, Union Bank of the Philippines (UnionBank) contributed P4.2 billion during the period, up 41 percent on robust revenues coming from the sustained double-digit growth in earning assets as well as strong trading gains during the period.

Non-listed food subsidiaries, namely Pilmico Foods Corp., Pilmico Animal Nutrition Corp., and AEV International Pte. Ltd. (AEVI), contributed P1 billion, down 31 percent due to declines from the feeds and farm business segments, which took a hit from the African swine flu (ASF).

Meanwhile, infrastructure unit Republic Cement & Building Materials Inc.’s income surged by 186 percent to P631 million this year on improved control on production costs, increased private sector demand, and the completion of several debottlenecking projects.

The group’s real estate segment under Aboitiz Land Inc. also saw income jump 106 percent to P829 million on the back of fair valuation gains on investment properties recognized in the third quarter.