AEV net income dips 15%

ABOITIZ Equity Ventures Inc. (AEV) reported a 15 percent decrease in its consolidated net income for the second quarter, a development attributed, in part, to lower selling prices of power.

The company told the Philippine Stock Exchange (PSE) that its consolidated net income amounted to P5.1 billion for the quarter. Power contributed 74 percent of AEV’s total earnings, while banking accounted for 19 percent. Its food business units contributed six percent and real estate, one percent.

“On a year-to-date basis, AEV’s consolidated net income rose by one percent year-on-year to P11.9 billion, from P11.8 billion. This translates to P2.16 in earnings per share,” the company said in its disclosure.

It said the revaluation of consolidated dollar-denominated liabilities and placements led to “a non-recurring loss of P1,102 million, versus last year’s non-recurring gain of P294 million. Adjusting for these, AEV closed the quarter with a core net income of P6.2 billion, up six percent year-on-year,” AEV further said.

The revaluation of dollar-denominated liabilities and placements also led to a non-recurring gain of P217 million as of June 30, 2013.

The summer heat provoked an increase in demand, and Aboitiz Power’s “attributable net generation” grew by five percent year-on-year from 5,096 gigawatt hours (GWh) to 5,360 GWh in January to June this year.

Average price down 11%

Power sales through bilateral contracts, however, dropped by three percent year-on-year “partly due to the conversion of a number of the company’s expiring power supply agreements from energy-based contracts to capacity-based type contracts,” the company said.

Aboitiz Power’s average selling price for its power also dipped by 11 percent year-on-year during the first half of 2013, it disclosed.

As for banking, AEV reported a 42 percent income growth year-on-year, from almost P2 billion to P2.8 billion.

“Union Bank of the Philippines’ resources expanded by 22 percent to P340.8 billion as of end-June 2013, propelled by the 37 percent growth in total deposits to P259.5 billion,” AEV said. “Capital ratios remained strong, providing adequate headroom to support growth, with Tier 1 ratio and total capital adequacy ratio at 16.7 percent and 19.5 percent.”

An increase in salaries, employee benefits and taxes pushed the bank’s total operating expenses up by 23 percent to P5.7 billion, the company disclosed.

Food

Pilmico Food Corp.’s income contribution increased by 21 percent year-on-year, from P522.2 million to P630.7 million.

The company attributed the increase to “the strong performance of its farms division,” which reported a net income of P114.6 million in the first half of the year, compared to a net loss last year of close to P7 million. It said the average selling price of market hogs also increased during the period.

Real estate

AboitizLand, which AEV said it acquired in November 2012, contributed P111.1 million to the consolidated net income.

Residential sales accounted for 68 percent of total revenues, pegged at P612.5 million. The industrial segment earned P179.2 million, nearly 29 percent of total revenues for AEV’s real estate arm. Commercial and property management contributed P17.7 million. AboitizLand plans to spend P1 billion this year for various construction projects in Priveya Hills, The Persimmon and Ajoya.

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