Aboitiz Equity Ventures ended the year with a net income of PHP22 billion, 1% lower than the PHP22.2 billion recorded during the same period last year.
Power accounted for 57% of the total income contributions from AEV’s Strategic Business Units in 2019, followed by Banking and Financial Services (30%), Food (7%), Land (4%), and Infrastructure (2%).
Without one-off gains, AEV’s core net income for 2019 was PHP21.5 billion, 7% lower year-on-year (YoY) from PHP23.1 billion. AEV recorded consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) of PHP60.2 billion for 2019, 1% lower than the PHP60.7 billion recorded during the previous year.
Despite challenges in our power business last year, our portfolio was largely able to sustain its operational and bottom line performance, as better-performing businesses continued their positive trajectory. As we commemorate the 100th year of our majority owner, Aboitiz & Co., we will continue to build a well-diversified and resilient investment portfolio into the next decade by advancing business and communities
– Sabin M. Aboitiz, President and CEO, AEV
Net income contribution of AboitizPower to AEV for 2019 decreased by 20% YoY, to PHP13.3 billion from PHP16.7 billion.
EBITDA recorded for 2019 for the generation and retail electricity supply businesses was PHP36.2 billion, a 16% decrease YoY. This was primarily due to the outages experienced by the company’s coal facilities and exacerbated by the need to purchase replacement power at higher spot market prices. Replacement power was also purchased from the spot market as AboitizPower had contracted ahead in anticipation of Therma Visayas’s incoming capacity. Decreased spot market sales further eroded YoY earnings.
EBITDA for the distribution business in 2019 was PHP8.2 billion, flat YoY. Energy sales increased by 6% to 5,851 gigawatt-hours (GWh) during 2019, from the 5,540 GWh recorded in 2018. The increase in earnings, however, was mitigated by lost margins from the decommissioning of the Bajada power plant.
The income contribution of UnionBank to AEV for 2019 amounted to PHP7.2 billion, 100% higher than the PHP3.6 billion recorded in the previous year.
On a stand-alone basis, UnionBank and its subsidiaries posted a record net income of PHP14 billion in 2019, 100% higher than the PHP6.9 billion recorded in 2018. This growth was mainly due to revenue growth from the increase in earning assets and improved margins, as well as from healthy trading gains during 2019.
AEV’s non-listed food subsidiaries’ (Pilmico Foods Corporation, Pilmico Animal Nutrition Corporation, and Pilmico International Pte. Ltd.) income contribution to AEV amounted to PHP1.58 billion for 2019, 2% higher than the PHP1.56 billion recorded in the previous year.
For 2019, 48% of the Food Group’s total earnings were generated offshore, compared to the 15% recorded in the same period in 2018. Gains from the Food SBU’s overseas unit offset local declines.
AEV’s non-listed real estate businesses, comprising Aboitiz Land and its subsidiaries, reported a consolidated net income of PHP943 million for 2019, a 46% increase from the PHP645 million recorded in 2018. This was primarily due to fair valuation gains on investment properties recognized in 2019 which were not present in 2018.
For the Infrastructure group, income contribution of Republic Cement & Building Materials to AEV for 2019 amounted to PHP612 million, 187% higher than the PHP213 million recorded in 2018. This was primarily due to a slight increase in private sector demand for cement, the completion of several debottlenecking projects, and improved controls on production costs.