Aboitiz Equity Q1 income up 17% to P6.8-B

MANILA, Philippines – The publicly listed holding company of the Aboitiz family earned P6.8 billion in the first 3 months of 2013, reflecting a 17% increase from a year ago.

In a disclosure on Friday, May 3, Aboitiz Equity Ventures, Inc. (AEV) attributed this mostly to the P119 million one-time gains on dollar-denominated loans and investments, as well as the P1.272 billion proceeds from the sale of thrift banking arm, City Savings Bank.

Without these non-recurring gains, AEV’s core net income was at P5.5 billion, a mere 1.3% increase.

The following shows the performance of the business units during the first quarter:

POWER (62.1% of AEV’s total income), via Aboitiz Power Corp

• P3.5 billion income contribution in the 1st quarter, down 18% from P4.3 billion a year ago. Adjusted for one-time gains, the power unit’s income was down 11% to P3.5 billion from P3.9 billion. 
• P3.1 billion income contribution from the power generation business, down 22% mainly due to the drop in ancillary volumes accepted by the National Grid Corporation of the Philippines (NGCP). Lower water levels at the the impounding dams have also limited its ability to sell energy at the spot market. 
• Average price for its power was down by 11% during the quarter on the back of a 6% fall in average selling price of electricity sold to the spot market due to lower demand in the first two months of the year and lower capacity on outage for the quarter. 
• Net generation was flat at 2,450 GWh for the period, while power sales through bilateral contracts decreased by 11% to 1,948 GWh. Spot market sales improved by 96% from 256 GWh to 502 GWh. Attributable sales was down by 4% to 1,419 MW from 1,483 MW due to lower sales for ancillary services. Ancillary volumes dropped by 66% during the quarter due to the lower acceptance rate by the NGCP. 
• Power distribution group’s income contribution increased by 2% to P576 million from P563 million. The growth was primarily driven by higher electricity sales from the residential (3%) and commercial segments (2%). Sales to the industrial segment declined by 0.5% due to the effects of Typhoon Pablo which affected both the banana and coconut plantations in northern Davao, thereby causing a major decline in the consumption of customers that support these industries. 
• The group’s year-to-date gross margin on a per kWh basis stood at P1.63.

BANKING (31.5% of total), via Union Bank of the Philippines (UnionBank)

• P1.8 billion income contribution to the group, up 35% growth from P1.3 billion. Hefty trading gains and a sharp increase in income from subsidiaries were the main reasons for the income hike. 
• Net interest income grew by 16% to P2.0 billon on sustained improvement in net interest margins, resulting from the expansion in average loan portfolio, coupled with the growth in average levels of low cost deposits. Other income jumped by 35% to P5.3 billion from P3.9 billon a year ago, on the back of higher trading gains, service charges, fees and commissions, and miscellaneous income. Premium revenue, on the other hand, fell to P0.4 billion as a result of lower sales of First Union Plan’s Inc. (FUPI) pre-need plans.
• Total operating expenses rose to P3.1 billion, up 19% on increases in salaries and employee benefits, taxes and licenses and miscellaneous expenses. Trust fund contribution declined to P0.4 billion. 
• Total resources reached P315.1 billion, up 13%: Deposits reached P212.9 billion, up 12%. Loans and other receivables amounted to P98.1 billion from P119.7 billion, mainly on lower levels of securities purchased under reverse repurchase agreements. 
• UnionBank’s capital ratios continue to support future growth, notwithstanding the acquisition of CitySavings, with Tier 1 ratio and total capital adequacy ratio at 15.9% and 18.4%, respectively

FOOD (5.7% of total), via Pilmico Foods Corp.

• Income increased 48% (no other details provided). Farm division’s contribution swung to P56.5 million income from a net loss of P16.4 million in 2012. This despite a 1% drop in volume sales and largely due to higher average selling price of market hogs.

REAL ESTATE (0.7% of total), via Aboitiz Land, Inc.

• P43.1 million net income contribution in 1st quarter. Of the total P258 million revenues, 63% came from the residential segment, 36% (P92 million) from industrial, and P3.8 million from commercial and property management segments.

– Rappler.com