AEV profit down 42% to P2 billion

MANILA, Philippines — Foreign exchange (forex) losses weighed on the first quarter profit of listed Aboitiz Equity Ventures Inc. (AEV).

AEV said net income dropped 42 percent to P2 billion after it recognized non-recurring losses of P262 million during the period due to unrealized forex losses from the revaluation of dollar-denominated assets.

Without these one-off losses, the company’s core net income declined by 41 percent to P2.3 billion.

Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) rose five percent to P11.8 billion.

Power accounted for 55 percent of the total income contributions from AEV’s strategic business units, followed by banking and financial services at 46 percent, food (two percent), infrastructure (one percent)  and real estate (negative four percent), respectively.

“The strong showing of our banking and financial services and food units have helped shore up our operational performance, underscoring the resilience provided by a diversified portfolio. This same resilience will also help us face headwinds from the coronavirus disease 2019 or COVID-19,” AEV president and CEO Sabin Aboitiz said.

“We will continue to look for opportunities to keep the country’s economy moving as we carefully evaluate our business strategy,” he said.

Aboitiz Power Corp.’s net income contribution during the period decreased by 43 percent to P1.6 billion. Its net income for the quarter also slid by 43 percent to P2.1 billion.

The power unit’s performance during the period was affected by outages in Therma South Inc. (TSI) and GNPower Mariveles, and lower selling prices which mitigated the fresh contributions of Therma Visayas and decreased purchased power costs.

The banking unit, under Union Bank of the Philippines, contributed an income of P1.3 billion which is 23 percent higher than the previous year.

UnionBank and its subsidiaries recorded a net income of 2.6 billion, up 22 percent due to revenue growth.

AEV’s non-listed food subsidiaries—Pilmico Foods Corp., Pilmico Animal Nutrition Corp., and Pilmico International Pte. Ltd. which now has Gold Coin Management Holdings Ltd. —contributed P60 million during the quarter, a 56 percent slide from P137 million.

Gains from Pilmico International were outweighed by  net loss of  Pilmico’s local subsidiaries.

The real estate businesses, comprised of Aboitiz and Inc. and its subsidiaries, reported a consolidated net loss of P110 million, higher than the P44 million posted a year ago.  Revenues fell 24 percent to P508 million due to higher forfeitures and lower construction progress resulting from the eruption of Taal Volcano and the enhanced community quarantine due to COVID-19.

For the Infrastructure group, Republic Cement & Building Materials Inc. saw an income contribution of P61 million,a reversal of the P32 million loss recorded in the same period last year—due to strong demand growth during the first two months of the year and tempered by the slowdown in construction activities in March due to the Luzon-wide quarantine.