OPTIMISTIC about the Philippine power industry, the Aboitiz Power Corp. (AP) is looking forward to an “even stronger performance” in the field in the coming years.
“While we look back to a fabulous year for AP, we can look forward with confidence to an even stronger performance in the future. We have never been as optimistic as we are today about the Philippine power industry in general and AP in particular,” said AP president and chief executive officer Erramon Aboitiz.
He said this during AP’s first annual shareholders’ meeting as a publicly listed company yesterday at Cebu City Marriott
Hotel.
Opportunities abound
During the presentation of his report, he said the existing conditions in the country’s power industry, such as deregulation, increased competition, further privatization of government-owned assets, performance-based rate marketing, and open access, allow for “enormous opportunities” for the company’s growth.
For the first three months of this year alone, AP already posted earnings growth of 144 percent, resulting in a quarterly profit of P1.01 billion, compared to P415 million for the same period last year.
Earnings per share as of the first quarter of 2008 was at P0.14 compared to P0.08 for the same three months last year.
Aboitiz reported that the company’s generation group provided 63 percent or P639 million of its total net income, while distribution utilities contributed the balance of P383 million.
Meanwhile, consolidated earnings before interests, taxes, depreciation and amortization (Ebitda) reached P1.26 billion or 98 percent higher than in 2007.
Big growth
Under the generation group, AP sold 377 gigawatt hours (gwh) of power for the first quarter, which is 10 times that of the same period last year.
“Most of the growth (is coming) from last year’s acquisitions, specifically SN Aboitiz Magat, Cebu Private Power Corp., East Asia Utilities Corp., and STEAG State Power. Our mini hydros and Luzon Hydro also showed impressive growth due to the higher rainfall experienced in the first quarter,” Aboitiz said.
Under the distribution group, AP’s utilities saw electricity sales grow 17 percent to 744 gwh during the first quarter compared to 633 gwh in the same period last year. (See rate hike story in 19.)
“(This was) driven by the acquisitions and increased stakes in AP’s EnerZones, as well as the robust growth from our industrial customers. Stripping out increased sales from the acquisitions, our distribution group still has healthy growth of seven percent on an organic basis,” Aboitiz said.
Also, he reported that “favorable” economic conditions led to strong electricity sales for AP’s distribution group in 2007, while the increase in the generating capacity of the generation group led to a higher contribution from power revenues.
AP ended 2007 with a net income of P4.1 billion, a 124 percent year-on-year bottomline growth.
“Notwithstanding the increase in your company’s outstanding shares due to the initial public offering (IPO), earnings per share further increased to 66 centavos from 37 centavos in 2006,” Aboitiz said.
Even when stripped of the foreign exchange profits of AP and certain subsidiaries, the recurring income still increased by 81 percent last year compared to 2006.
He also announced that for the first time, the power generation business accounted for 63 percent of AP’s net income for 2007, or an increase of 213 percent from the previous year when it accounted for only 45 percent of the net income.
He later told reporters that the company is anticipating the generation group to be playing a bigger role for AP.
Due to successful bidding for government assets and active acquisition of other projects, he told stockholders that AP ended 2007 with investments in 1,035 megawatts of generating assets.
“Although AP’s stock price ended in 2007 below its listing price despite our good results, our hope is that as the investment environment normalizes, investors will discover the value proposition we see in AP and its future,” he added.
In a new conference, Iker Aboitiz, AP first vice president and chief finance/information officer, reported that AP’s net cash for 2007 was over P7 billion.
“We have negative ratio in debts because of our net cash. Our cash balance is P10.6 billion, and our debt is about P3.4 billion. That’s about P7.2 billion in net cash. Our equity standing is about P28 billion,” he said. (NRC)
