AEV reports lower net income for 1st 9 months-A A +A
Friday, November 1, 2013
ABOITIZ Equity Ventures, Inc. (AEV) saw its year-to-date consolidated net income decline by eight percent year-on-year (YoY) to P16.6 billion from P18 billion. This translates to P3.00 in earnings per share. Power accounted for 71 percent, followed by Banking, Food and Real Estate strategic business units (SBUs) with income contributions of 22 percent, six percent, and one percent, respectively.
For the period ending Sept. 30, the revaluation of consolidated dollar-denominated liabilities and placements resulted in a non-recurring loss of P1.103 billion. A one-time net loss was also recognized by the Power SBU, mostly due to the pre-termination of its loans resulting in a one-time write-off of the unamortized borrowing costs.
AEV’s share in this amounted to P67.5 million. On the other hand, AEV booked gains of P1.298 billion from the sale of City Savings Bank, Inc. (CitySavings). Adjusting for these one-offs, AEV’s core net income amounted to P16.4 billion, which is seven percent lower than last year.
“We remain pleased with the performance of our business units. Our challenge in the coming years is to deploy the cash flow we are generating into ventures that meet our hurdle rates. For one, we are very keen on participating in the government’s public-private partnership projects,” said AEV president and chief executive officer Erramon I. Aboitiz.
AEV ended the third quarter of 2013 with a consolidated net income of P4.6 billion, recording a decrease of 25 percent YoY. Of the total earnings contributions from the Company’s SBUs, Power accounted for 80 percent while the income contribution of the Banking, Food and Real Estate SBUs were at 12 percent, seven percent and one percent respectively.
For the three-month period in review, the revaluation of consolidated dollar-denominated liabilities and placements resulted in a non-recurring loss of P119.7 million. This was partly offset by the reversal of a previous impairment provision amounting to P29.9 million for the period related to the sale of a stake in an associate, as well as AEV’s share in the Power SBU’s one-time gain resulting from the redemption of shares in several affiliates. Adjusting for these, AEV closed the quarter with a core net income of P4.7 billion, down 25 percent YoY.
For the same period, Aboitiz Power Corp. (AboitizPower) registered an income contribution of P11.0 billion, registering a 22 percent decrease when compared to the previous year’s P14.1 billion. When adjusted for non-recurring items, the Power SBU recorded a 12 percent YoY decrease in its earnings share, from P13.7 billion to P12.1 billion.
The Banking SBU’s income contribution for the first nine months of 2013 recorded an 8 percent growth YoY, from P3.1 billion to P3.3 billion. This was driven by higher interest income and other income, as well as the increase in the company’s stake in Union Bank of the Philippines.
AEV’s Food unit, Pilmico Foods Corp., recorded a three percent YoY increase in its income contribution for the first nine months of 2013, from P906.2 million to P932.1 million.
In November 2012, AEV acquired Aboitiz Land, Inc., thereby making it the real estate arm of AEV. AboitizLand posted a consolidated net income contribution of P162.8 million during the first nine months of 2013. Total revenues amounted to P922.1 million, 68 percent of which came from the residential segment.
As of Sept. 30, the company’s consolidated assets amounted to P201.6 billion, nine percent lower than the yearend 2012 level. Cash and cash equivalents were at P18.1 billion, 46 percent lower than the yearend 2012 level of P33.7 billion. (PR)
Published in the Sun.Star Cebu newspaper on November 02, 2013.