NEXT to its power group, the banking business under the Aboitiz Equity Ventures Inc. (AEV) is the second biggest contributor to the company’s total revenue of P31 billion in 2007.
The banking group, comprised of City Savings Bank (CSB) and Union Bank of the Philippines (Unionbank), accounted for 23 percent of AEV’s total income, said Erramon Aboitiz, executive vice president and chief operating officer, during the company’s annual stockholders’ meeting held at the Cebu City Marriott Hotel.
“We (also) ended 2007 with record earnings of P5.8 billion, a 54-percent increase from 2006,” he said in his report.
The power group, which is 73-percent owned by AEV, contributed 61 percent of the total revenues.
Aboitiz also said that the banking group ended 2007 with “solid financial results” as it contributed P1.24 billion in revenues, 11 percent higher than 2006.
From the bank’s total group contribution, Unionbank posted an income of P1.18 billion last year even with low interest rates in the market while CSB contributed P63 million.
Assets
Unionbank’s performance can be attributed to the increase of its average earning assets to 31 percent, as well as growth in the amount of total loans to P40.3 billion. Non-performing loans were reduced to P4.2 billion last year.
The bank also posted an increase of 18 percent in its non-interest income, mainly due to a 16-percent growth in service charges, fees and commissions and higher gains from the sale of foreclosed assets and selected non-performing loans last March 2007.
With total assets at P188 billion in 2007, Unionbank is now the sixth largest private domestic universal bank in the country.
Although there was a slowdown in deposit growth by the end of 2007, capital base is at P27 billion, an increase of 37 percent due to the bank’s follow-on equity offering last May 2007.
On July 23, 2007, Unionbank completed the full system integration of International Exchange Bank (iBank), which it acquired in 2006. Unionbank, after the merger, will soon have a new logo.
CSB, on the other hand, has grown its total resources by 65 percent, posting a P4-billion worth of assets at the end of 2006.
But Aboitiz said CSB’s non-performing loans remain flat at 2.45 percent, which is below industry standards.
Expansion
However, CSB will continue on its expansion efforts with nine new branches and extension offices being planned and
targeted for completion within the year.
The banking group, said Aboitiz, will continue to look for opportunities
The Aboitiz Transport System Corp. (ATS) transport group reported a “strong performance” in 2007 as it ended the year with a net income contribution of P318 million—a 124-percent increase over 2006 figures.
Profit performance of ATS was a result of gains from the sale of assets, a factor that enabled the company to lower financing costs.
ATS’ RoRo (roll-on, roll-off) service also posted a P859 million in revenues, a 25 percent share of total freight revenues in 2007.
The food group also remained a “consistent” profit and dividend contributor.
Pilmico Foods Corp. (Pilmico) contributed P530 million to AEV’s total income in 2007, despite an increase in the prices of raw materials.
The company’s feeds business and swine operations recorded a 19-percent year-on-year growth in combined revenues, from
P2.8 billion to P3.3 billion.
Aboitiz also revealed to shareholders that the food group, through Fil-Am Foods, is undergoing expansion of its swine
finishing and breeding capacities that will start operations by 2009 and 2010, respectively.
Pilmico has also started the construction of a new feedmill within its milling complex in Iligan. This will be operated by Fil-Am Foods and is scheduled to operate within the year.
All in all, AEV’s total assets have increased by 60 percent at P65.5 billion and stockholder’s equity grew by 65 percent to P38.1 billion.
The treasury share sale at the parent company level has also raised P6 billion for the company.
AEV’s cash position increased from P8 billion in 2006 to P18.6 billion at the end of 2007. The company’s cash position has also allowed the company to end 2007 with a negative net debt-to-equity ratio of negative 0.15 as against 0.11 in 2006.
By the first quarter of 2008, AEV posted a net income increase of nine percent to P1.18 billion or an equivalent of 21
centavos per share.
For this year, AEV also allocated an operating budget of P4.6 billion. (DME)
