A banner year for Aboitiz Equity Ventures

We attended the 12th Annual Shareholder's meeting "as a public company" of the Aboitiz Equity Ventures (AEV) yesterday at the Marriott Hotel and in his President's Report, Pres. Jon Ramon Aboitiz reported a banner year for 2005, posting a record profit of P3.16 billion, up 29% over 2004's restated earnings.

AEV's earnings per share grew 28% to 65 centavos. Return on equity was a record high 19%. Mr. Aboitiz said consolidated revenues jumped 21% to over P27 billion while earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to P6.5 billion, 11% higher than in the previous year.

We are proud that this Cebu-based conglomerate continues to excel in their business endeavor with all operating companies performing well in the year 2005, despite the political darkness surrounding the county. The only company that didn't perform as expected was the Aboitiz Transport System (ATS) because of the high fuel cost that plague most of the year 2005 and continues even up to this year. But despite this, ATS has been the industry leader in fuel efficiency.

The main revenue generator for AEV comes from the power group, which accounts for 61% or P2.123 billion of total business contributions. The power generation companies contributed P1.050 billion, 42% higher than in the preceding year, while the distribution utilities turned in P1.073 billion, up 28% from P840 million in 2004.

We can expect exciting developments for the year 2006 as AEV's Chief Operating Officer Erramon Aboitiz indicated that they would be building or acquiring two hydroelectric plants in Davao, which has a total generating capacity of 72-MW. Plans are also afoot to acquire plants that the National Power Corporation (Napocor) will be selling to private companies. With its partner, the SN Power of Norway, they are looking at the Magat Dam and the Pantabangan Dam that supplies Luzon and Metro Manila.

AEV is also interested in bidding also for the 200MW coal-fired plant in Naga, which is scheduled for bidding on June 14th. When I asked whether this decision was made because of that earthquake that struck the Tongonan Geothermal Plant last week, where power to Cebu Province was cut, Jon Aboitiz remarked, "We've always wanted a power plant in the island of Cebu precisely because of what happened last week." Come to think of it, there's been no new power plant being constructed in Cebu Province in the last five years now and believe me, we needed this plant yesterday!

As we wrote last week, the banking group led by Union Bank and City Savings Bank was the next biggest contributor to AEV earnings, accounting for 27% or P930 million. Union Bank contribution amounted to P911 million, 11% higher than in 2004. Total resources grew 6% to P108 billion in 2005, boosted by an 11% growth in deposits that reached P60 billion.

Thrift bank City Savings Bank saw its deposit levels hit the billion-peso mark for the first time. As we joked with Jon Ramon Aboitiz, using the famous City Savings Bank advertisement, "Pagamay, gamay lang" or "Pa hotcake, hotcake lang." But as Jon Aboitiz reported, this small bank's deposit level has hit a billion pesos! Erramon Aboitiz proudly announced that the acquisition of iBank would bring new revenues to the bank group.

How does the AEV do all this? Well, their new bright red corporate logo says it all, "Passion for better ways". They are driven to excel and driven to do things better than the others, but above all, they are driven to serve.

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When I read Gary Lao's story about the Cebu City Council wanting to block a movie, I really thought that they were referring to the controversial "Da Vinci Code" which is slated to be shown tomorrow. But it turned out that it was a different movie, actually it's a documentary entitled, "Bunso" which was filmed probably more than 10 years ago when Cebu City still didn't have anything for minor offenders. But since Mrs. Margot Osmeña began her Operation Second Chance, this problem has been solved.

But apparently, some non-government organizations (NGO) continued to show this video documentary, perhaps as a way to get funding from donors. Last year, when I did my TV show on location in Operation Second Chance, Mrs. Margot Osmeña appraised me about this problem. So I'm with the Cebu City Council in asking the producers to stop showing this documentary. Perhaps, we should even ask them to do a new documentary?

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