AEV reports P23.9B net income

MANILA-Aboitiz Equity Ventures, Inc. (AEV) ended 2012 with a consolidated net income of P23.9 billion, registering an increase of 13 percent year-on-year. This translates to P4.33 in earnings per share.

Power accounted for the biggest share at 78 percent, which was followed by banking and food units with income contributions of 16 percent and five percent, respectively. The remaining share was accounted for by several other investee companies, including the newly acquired property unit.

Aboitiz Power Corp. (AboitizPower) ended the year with an income contribution of P18.8 billion, vis-a-vis last year’s P16.5 billion. When adjusted for non-recurring items, the power unit recorded a 13 percent year-on-year increase in its earnings share, from P16.1 billion to P18.2 billion.

“With a growing economy comes an increased demand in energy,” said AEV chief executive officer Erramon Aboitiz.

“For the next four years, AboitizPower and its partners will invest P85 billion for building new power plants across the Philippines. Reliable and affordable supply of power will be critical in sustaining long term economic growth for the country as a whole,” said Aboitiz.

In 2012, the power generation business contributed earnings of P17.5 billion, recording a 12 percent year-on-year growth. The increase in the group’s bottomline performance was due to the higher average selling price and net generation recorded for the period.

The group’s average price for its power increased by three percent year-on-year. This was on the back of a 40 percent year-on-year rise in average selling price of electricity sold to the spot market as a result of the combination a tight supply situation brought about by higher outage levels and an increase in demand due to the hotter climate and increased economic activity during the year.

AboitizPower’s net generation for 2012 registered a 13 percent increase from 9,422 GWh to 10,660 GWh. This was mainly accounted for by the 17 percent expansion in power sales through bilateral contracts. On a capacity basis, the company’s attributable sales increased by nine percent from 1,413 MW to 1,547 MW, given the rising capacity sales through bilateral contracts. Capacity sold factors in general rose during the year, with the coal, geothermal and oil plants registering at 74 percent, 85 percent, and 93 percent, respectively.

Banking

The banking unit’s income contribution for 2012 registered a 12 percent improvement, from P3.4 billion to P3.9 billion.

Union Bank of the Philippines (UnionBank) ended the period with an earnings contribution of P3.3 billion, up by 14 percent. This was on the back of higher net interest income and hefty trading gains booked during the period.

Net interest income grew by five percent to P7.3 billion, as the 25 percent improvement in funding costs from interest bearing liabilities more than offset the eight percent drop in income from earning assets.

Total other income rose by 13 percent to P10.8 billion from P9.6 billion a year ago mainly on hefty trading gains, which surged by 20 percent to P6.5 bn. Premium revenues, on the other hand, fell by 10 percent to P1.2 billion as a result of lower sales of First Union Plan’s Inc. pre-need plans.

Total operating expenses amounted to P8.6 billion, five percent higher than the P8.2 billion last year, mainly attributable to increases in salaries and other employee benefits.

UnionBank’s asset base expanded to P275.9 billion as of end-2012, with a deposit base of P186.0 billion and a loan book of P119.7 billion. The bank’s Tier 1 and total capital adequacy ratio (CAR) further strengthened to 18 percent and 20.7 percent, respectively, comfortably above existing regulatory minimum and forthcoming Basel III requirements.

AEV’s non-listed thrift bank, City Savings Bank (CitySavings), contributed earnings of P520 million in 2012, which was lower by two percent year-on-year. The decrease is mainly attributed to the bank’s ongoing expansion program, which led to a 28 percent increase in operating expenses.

The company’s food unit, Pilmico Foods Corp., recorded a five percent growth in its income contribution for 2012 to P1.3 billion, from P1.2 billion the previous year.

This was driven by a six percent increase in overall sales, with the flour, feeds, and farm divisions all posting an increase in sales volumes. (PR)