Foreign exchange (forex) losses pulled down the Aboitiz Group’s income by 2 percent in the first half of the year ending June.
Its diminished profitability was traced in the main to Aboitiz Power Corp. (Aboitiz Power), which reported on Wednesday with net income of only P9.7 billion, 2 percent lower than in the same period a year ago.
The decline was attributed to non-recurring losses of P744 million, as against last year’s gain of P130 million, from forex losses on the revaluation of dollar-denominated liabilities.
Aboitiz Equity Ventures (AEV) Inc. said its income fell to P10.3 billion, from the previous year’s P10.5 billion. AEV recognized forex losses of P495 million for the period, from last year’s gains of P100 million after the firm revalued its dollar-denominated loans.
Stripping out losses, the company’s income would have increased to P10.4 billion, from last year’s P10.8 billion, it added.
For the second quarter alone, the income of AEV, whose main assets are in power generation, rose by a slim 3 percent to P5.6 billion, from last year’s P5.4 billion.
The income contribution of AboitizPower to AEV decreased by 2 percent year-on-year (YoY )to P7.5 billion, from P7.7 billion last year.
On a stand-alone basis, AboitizPower recorded an increase of 6 percent YoY in core net income for the first half to P10.5 billion, from P9.8 billion last year.
It recognized nonrecurring losses of P744 million, from last year’s gain of P130 million, comprising forex losses resulting from restatement of dollar-denominated debt.
One-off losses
WITHOUT the one-off losses, AboitizPower’s core net income grew 6 percent from P9.8 billion to P10.5. Consolidated earnings before interest, taxes, depreciation and amortization (Ebitda) grew from P18.4 billion to P21.8 billion, an 18-percent increase YoY.
The power firm’s second quarter income improved by 8 percent to P5.3 billion, from P4.9 billion.
AEV’s power-generation business group accounted for 84 percent of the company’s Ebitda, recording a consolidated share of P18 billion for the first half of 2017, up 22 percent YoY. At the core net income level, the generation business grew 8 percent from P8.2 billion to P8.9 billion at end-June.
After taking into account one-off items, AboitizPower’s generation-business income contribution amounted to P8.1 billion, almost flat compared to the same period last year.
For the period, AboitizPower’s capacity sold increased by 33 percent YoY, from 2,033 megawatts (MW) to 2,706 MW, mainly driven by the additional capacity of GNPower Mariveles Coal Plant Ltd. Co. and higher capacity sold from hydro units due to better hydrology in 2017.
Power distribution
ABOITIZ POWER’S Ebitda for the distribution business increased by 3 percent from P3.3 billion to P3.4 billion at end-June this year. Net income contribution increased by 3 percent YoY for the first half of 2017 to P1.8 billion.
AboitizPower’s attributable sales in the distribution group for the period was at 2,546 gigawatt-hours, registering a 1.4-percent increase from the same period last year.
“Our core power-generation and power-distribution businesses have continued to post significant growth. Our new power plants are contributing significantly, while our existing power plants are continuously improving in terms of availability and reliability,” AboitizPower President and COO Antonio Moraza said. “We will continue, likewise, to take advantage of the economic growth in our franchise areas by providing reliable and cost-effective power coupled with the best possible service.”
“Our projects in the pipeline are on track and continue to be aligned with our balanced-mix strategy,” Moraza added. “These projects will push us to reaching our target of 4,000 MW of net attributable capacity by 2020.”
Other segments
THE income contribution of Union Bank of the Philippines (UnionBank) to AEV increased by 9 percent to P2.1 billion, from P1.9 billion.
On a stand-alone basis, UnionBank recorded a net income of P4.3 billion for the first half of 2017, 8-percent higher compared to the P4.0 billion it earned last year.
Aboitiz Land Inc., meanwhile, registered a net income of P202 million, or more than double of last year’s P85 million, due to higher sales booked by the industrial-business unit and improved sales and construction progress by the residential-business unit.
Revenues reached P1.5 billion, an increase by half of last year’s revenues. Of its revenue, the residential-business unit contributed half, or about P764 million, the industrial-business unit contributed 45 percent, or P684 million, and the commercial-business unit and others at 5 percent, or P76 million.
From the infrastructure group, Republic Cement and Building Materials Inc.’s income contribution to AEV fell by 43 percent to P494 million, from P869 million last year.
“Cement-demand slowdown was experienced in the first half of 2017, as compared to the same period last year when there was strong demand due to the election season,” the company said in a statement.