Aboitiz takes a beating in H1 2019

Ralf Rivas
Conglomerate Aboitiz Equity Ventures reports profits of P9 billion in the 1st half of 2019, 11% lower than the P10.1 billion in the same period in 2018

MANILA, Philippines – Most companies under the Aboitiz group reported lower earnings in the 1st half of 2019, bringing the net income of holding company Aboitiz Equity Ventures (AEV) to P9 billion, 11% lower year-on-year.

Taking out one-off gains, AEV’s core income stood at P8.9 billion, 16% lower than the P10.6 billion from the same period a year ago.

Power accounted for 67% of the total income, followed by banking (24%), food (6%), infrastructure (2%), and land (1%).

“While challenges to our bottom line continue to persist, we have seen recovery across our entire portfolio compared to the same period last year and compared to the previous quarter,” said Erramon Aboitiz, AEV president and chief executive officer.

The net income of Aboitiz Power Corporation (AboitizPower) for the 1st half of the year stood at P8.6 billion, 5% lower than the P9.1 billion recorded in the same period last year.

AboitizPower’s contribution to AEV decreased by 5% from P7 billion to P6.7 billion, largely due to higher volume and cost of purchased power during January to June.

AboitizLand Incorporated also reported a massive 79% dip, with consolidated net income of P60 million from the P283 million in 2018. Its revenues amounted to P1.4 billion, 28% lower year-on-year. This was primarily attributable to the deferred revenue recognition of industrial lot sales for its industrial unit.

AEV’s non-listed food subsidiaries’ (Pilmico Foods, Pilmico Animal Nutrition, and AEV International) income contribution to AEV amounted to P552 million for the 1st half of 2019, a 17% decrease from the P662 million a year ago.

In contrast, Republic Cement and Building Materials’ income contribution significantly improved. It was able to generate P249 million for the parent company, 473% higher than the P44 million in 2018.

This was primarily due to improved control on production costs together with higher market prices and increased private sector demand.

Meanwhile, Union Bank of the Philippines (UnionBank) reported a net income of P4.8 billion, 2% higher compared to the same period last year, on the back of growth of its earning assets.

UnionBank’s income contribution to AEV for the 1st half of 2019 increased by 3% to P2.4 billion, from P2.3 billion recorded during the same period in 2018.

“We still feel we are well-positioned to reap the benefits of our country’s ‘demographic dividend’ and to take advantage of opportunities to evolve and expand beyond our borders, as we deepen our role in building a better future for communities,” Aboitiz said. –

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.