(UPDATED) - Except for the feeds and flour business segments, business units of Aboitiz Equity Ventures, Inc. (AEV) led by the power sector reported higher earnings for the third quarter of 2021 as prospects for an economic rebound grew brighter.
AEV president and CEO Sabin M. Aboitiz said “the light at the end of the tunnel (is) growing brighter” less than two years into the coronavirus disease (COVID-19) pandemic.
He said 2022, an election year, is projected to be even better. He said the company will work closely with the next administration in “defeating the virus by learning to function with it to help our country along the path to economic recovery.”
In its disclosure to the Philippine Stock Exchange Tuesday, Nov. 2, 2021, AEV said its consolidated net income grew 38% to P6.1 billion for the third quarter.
The company recognized non-recurring gains of ₱252 million during the period, compared to the ₱16 million in non-recurring gains for the corresponding period in 2020, representing foreign exchange gains from the revaluation of dollar-denominated assets.
Without these one-off gains, the company’s core net income for the third quarter of 2021 was ₱5.8 billion, a 33% increase year-on-year (YoY).
Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) was 5% higher at ₱16.7 billion.
On a year-to-date (YTD) basis, AEV’s net income for the first three quarters of 2021 was ₱19.5 billion, 135% higher than the ₱8.3 billion recorded during the same period in the previous year.
Without the one-off gains from the revaluation of dollar-denominated assets, its core net income from January to September 2021 was ₱19.5 billion, a 133% increase YoY.
For the 9-month period, consolidated EBITDA was 28% higher at ₱49.5 billion.
“As we approach the end of 2021, we see the light at the end of the tunnel growing brighter in terms of the pandemic, and the Aboitiz Group’s performance trajectory continues to substantially improve throughout the current health crisis, posting figures that are again much higher than last year’s,” Aboitiz said.
“Our financial and cultural investments in innovative and agile thinking have paid off handsomely as we powered through the pandemic with strong performance indicators. This gives us every reason to believe that next year will be even better as COVID cases decrease, vaccinations increase and our new strategic partnership with Jera kicks into gear,” he added.
Power accounted for 58% of the total income contributions from AEV’s strategic business units (SBU) during the first three quarters of 2021, while financial services accounted for 26%. Income contributions from food, infrastructure and real estate SBUs were 7%, 6% and 3%, respectively.
How the SBUs performed
Aboitiz Power Corporation contributed P12.1 billion, 124% higher than the ₱5.4 billion contributed during the same period in 2020.
AboitizPower’s core net income for the first three quarters of 2021 was 143% higher at ₱15.7 billion due to commissioning revenue from GNPower Dinginin Ltd. Co. (GNPD) Unit 1, higher water inflow for AboitizPower’s hydro plants, and higher availability of the Therma Luzon, Inc. (TLI), Therma South, Inc.(TSI) and Therma Visayas, Inc. (TSI) facilities as well as higher WESM dispatch in compliance with the must-offer rule.
AboitizPower was also able to claim liquidated damages for the delay in the construction of GNPD Unit 1 and received the final payment for business interruption claims resulting from GNPower Mariveles Energy Center Ltd. Co. (GMEC) and AP Renewables Inc. outages in previous years.
Capacity sold for the first three quarters of 2021 increased by 8% to 3,663 megawatts (MW), compared to 3,394 MW in the same period in 2020. Energy sold increased by 11% to 18,442 gigawatt-hours (GWh) for the first three quarters of 2021, compared to 16,689 GWh for the corresponding period in 2020.
AboitizPower’s distribution business recorded an income share of ₱3.3 billion during the first three quarters of 2021, a 19% increase YoY, and accounted for 17% of income contributions from AboitizPower’s business segments.
Energy sales increased by 5% to 4,197 GWh during the first three quarters of 2021, compared to 3,994 GWh in the same period in 2020.
Union Bank of the Philippines contributed ₱5.4 billion, 26% higher than the ₱4.3 billion recorded during the same period in 2020.
AEV’s non-listed food subsidiaries (Pilmico Foods Corp., Pilmico Animal Nutrition Corp., and Pilmico International Pte. Ltd. which includes Gold Coin. Management Holdings Pte. Ltd.) contributed ₱1.5 billion for the first three quarters of 2021, 54% higher than the ₱969 million in the same period in 2020.
The farms business segment reported net income of ₱385 million during the first three quarters of 2021, recovering from a net loss of ₱703 million for the same period in 2020 due to the depressed market performance of hogs in the previous year following the spread of African Swine Fever in the country.
The feeds business segment recorded a net income of ₱1 billion during the first three quarters of 2021, 24% lower YoY on the back of the continuous rise in raw materials costs.
The flour business segment recorded ₱283 million in net income for the first three quarters of 2021, 50% lower than the corresponding period in 2020, on the back of lower by-product contributions, in addition to higher operating and administration costs.
AEV’s non-listed real estate businesses, comprising of Aboitiz Land, Inc. and its subsidiaries, reported a consolidated net income of ₱646 million for the first three quarters of 2021, 665% higher than the ₱85 million recorded in the same period in 2020.
AboitizLand contributed ₱2.9 billion in revenues for the first three quarters of 2021, 34% higher than revenue contributions from the same period in 2020. This increase was primarily due to increased sales, especially of sales with large spot down payments, as well as to increased construction and site development activities.
Out of AboitizLand’s revenue for the first three quarters of 2021, the residential business unit contributed ₱2.1 billion, the commercial business unit contributed ₱186 million, while the industrial business unit and others contributed the remaining ₱599 million, equivalent to 73%, 6%, and 21%, respectively.
The infrastructure group, through Republic Cement & Building Materials, Inc. contributed ₱1.4 billion, 247% higher than the ₱400 million recorded in the same period in 2020. This was primarily due to stronger market demand from the residential and infrastructure segments, as well as capital investments which resulted in increased overall efficiency. Republic Cement also benefited from a one-time gain brought about by the CREATE bill which reduced its deferred tax liabilities. (Ventures Cebu)