Aboitiz Equity Ventures (AEV) on Monday said it registered a first half consolidated net income of P11.8 billion, up 16 percent from a year earlier, mainly lifted by earnings in its power business unit Aboitiz Power Corp.
Its power subsidiary accounted for a lion’s share of the income contribution at 79 percent, followed by its banking and food units at 17 percent and 4 percent, respectively, AEV disclosed to the Philippine Stock Exchange.
The first half income translates to P2.14 earnings per share.
In the second quarter, AEV registered a consolidated net income of P6 billion or up 6 percent, the holdings company said in its disclosure.
AEV is the holdings and investment group of the Aboitiz family’s power, banking, and food businesses.
Aboitiz Power contributed P9.4 billion to AEV’s income, up from last year’s P8.1 billion. Adjusted for non-recurring items, the power company posted P8.9 billion – up 17 percent from P7.6 billion.
Power generation accounted for P8.7 billion of Aboitiz Power’s earnings, up 12 percent on the back of higher average selling prices and increased net generation, AEV noted in its statement.
The average price of power was up 7 percent during the first half while prices for the Luzon Grid’s Wholesale Electricity Spot Market (WESM) increased by 42 percent.
“The Luzon Grid recorded a 5 percent year-on-year expansion in its recorded peak demand, with the hotter climate as one of the factors pushing up demand level to almost 7,800 megawatts (MW),” AEV noted.
Aboitiz Power’s generated electricity rose 10 percent year-on-year to 5,096 gigawatt hours (GWh) from 4,640 GWh, feeding sales to bilateral contracts which grew by 14 percent.
AEV’s banking unit accounted for P2 billion in income contribution to parent AEV, up 37 percent from P1.4 billion.
Accounting for 90 percent of total earnings contribution is Union Bank of the Philippines at P1.8 billion, up 44 percent due to higher net interest income and hefty trading gains.
Union Bank’s net income from interests reached P3.7 billion, or up 8 percent from P3.4 billion. But total interest income declined by 3 percent to P5.7 billion due to lower average yields on earning assets and the drop in average levels due from other banks.
Also, Union Bank’s gross interest income on loans and other receivables and investment securities jumped to P3.5 billion and P2.1 billion, respectively, “as the expansion in the average levels of these investments more than offset the decline in its average yields,” the holdings company said.
The earnings contribution of AEV’s non-listed thrift bank City Savings Bank went down 6 percent to P197 million. “The bank’s ongoing expansion program and the implementation of various initiatives bumped up operating expenses by 31 percent year-on-year that largely caused the decline in its profitability,” AEV said.
But gross interest income of City Savings grew 23 percent at over P1 billion, mainly due to the robust growth in interest income on loans at P674 million.
City Savings closed the first semester with its loan portfolio up 18 percent at P11.7 billion, while total resources went up 14 percent to P15 billion.
“The increased profitability of our banking business is coming from higher interest income and opportunistic trading activities,” Aboitiz said
AEV’s food unit Pilmico Foods Corporation posted a 20 percent year-on-year decline in its first semester income contribution at P522 million from P650 million.
“Margin compression across all businesses was evident. Higher sales volume recorded by the flour and feeds divisions (were) countered by soft prices and rising input costs for all businesses,” the holdings company noted. — MJC/VS, GMA News
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