Aboitiz Equity Ventures Inc. (AEV) on Thursday reported a 34-percent increase in net income during the first half of the year to P10.5 billion, from P7.8 billion last year, on the recovery its power unit, which accounted for the bulk of its business.
The company said it incurred a nonrecurring gain of P100 million, against last year’s onetime loss of P110 million, which largely resulted from the power unit’s gain on step acquisition of East Asia Utilities Corp.
Adjusting for these one-offs, AEV’s core net income amounted to P10.4 billion, still a 31-percent increase from the previous year.
“Our two-pronged strategy of organic growth in our existing businesses and diversifying our income streams from our fifth leg—infrastructure-related businesses—is on track and paying off. We are very pleased with the strong contribution of our cement business and the prospects of infrastructure moving forward,” said Erramon Aboitiz, AEV president and CEO.
Power accounted for 67.1 percent of its business, followed by banking and financial services, at 16.8 percent; food, at 7.8 percent; infrastructure, at 7.6 percent; and property development, at less than 1 percent.
Aboitiz Power Corp. ended the first half with an income contribution to AEV of P7.7 billion, a 24-percent increase compared to the previous year’s P6.2 billion.
Union Bank of the Philippines contributed P1.9 billion to AEV’s income for the period, more than double from the previous year’s P866.7 million.
The surge in net income is primarily attributed to the robust growth in core recurring income, the company said.
AEV’s nonlisted food subsidiaries—Pilmico Foods Corp., Pilmico Animal Nutrition Corp. and Pilmico International Pte. Ltd.—reported an P885-million income contribution to the parent firm, flat compared with last year’s performance.
Feeds Philippines’s profit improved by 36 percent to P436 million, from last year’s P321 million, on account of strong volume and lower raw-material prices. Its flour’s net income for the first half of the year was 3 percent higher from last year’s P357 million, with increased volume.
Feeds Vietnam and farms both reported a drop in net income contributions, largely driven by lower prevailing selling prices.
Meanwhile, Aboitiz Land Inc.’s contribution fell by 60 percent to P85 million, from last year’s P213 million.
Revenues of the property developer, which plays mostly catch-up with the other players, reached P1 billion, or 16 percent lower than last year’s P1.2 billion.
There was a 63-percent decrease in revenues of the industrial business unit due to the lower LiMA Land sales, as prospective locators held off commitments in light of the recent national elections, but still mitigated by the residential and commercial business units recording revenue growth of 8 percent and 16 percent, respectively.
Republic Cement and Building Materials Inc. posted an income contribution of P869 million for the period, with stronger cement demand supported by growth in commercial and other nonresidential spaces, sustained demand in the residential sector and sustained government infrastructure spending.