[PRESS RELEASE]

AEV reported a PHP2 billion net income for the first quarter of 2020, a 42% decrease from the PHP3.5 billion recorded last year.

The company recognized non-recurring losses of PHP262 million during the period, compared to the PHP334 million in non-recurring losses for the corresponding period in 2019. These were due to unrealized foreign exchange losses from the revaluation of dollar-denominated assets. Without these one-off losses, the company’s core net income for the first quarter of 2020 was PHP2.3 billion, a 41% decrease year-on-year (YoY).

AEV recorded consolidated earnings before interest, tax, depreciation and amortization (EBITDA) of PHP11.8 billion, which was 5% lower YoY.

The strong showing of our banking and financial services and food units have helped shore up our operational performance, underscoring the resilience provided by a diversified portfolio. This same resilience will also help us face headwinds from Coronavirus Disease 2019 (COVID-19). We will continue to look for opportunities to keep the country’s economy moving as we carefully evaluate our business strategy.

– Sabin M. Aboitiz, President & Chief Executive Officer, AEV

Power accounted for 55% of the total income contributions from AEV’s strategic business units, followed by Banking & Financial Services (46%), Food (2%), Infrastructure (1%), and Real Estate (-4%), respectively.

Power

AboitizPower's net income contribution to AEV for the first quarter of 2020 decreased by 43% year-on-year YoY, to PHP1.6 billion from PHP2.8 billion. Its net income for the quarter was PHP2.1 billion, 43% lower YoY.

AboitizPower’s generation and retail supply business recorded EBITDA of PHP7.4 billion during the first quarter of 2020, 13% lower than the PHP8.6 billion recorded during the corresponding period last year. The variance was primarily due to the EBITDA for the first quarter of 2019 that included other income.

Excluding that, the company’s EBITDA would have been lower by only 3%. AboitizPower’s performance during the first quarter of 2020 was also affected by outages in TSI and GMCP, sand by lower selling prices. These offset the fresh contributions of Therma Visayas, Inc. (TVI)  and the decreased purchased power costs.

Income contributions from the generation and retail electricity supply businesses, which accounted for 65% of total income from AboitizPower’s business segments, totalled PHP1.9 billion, 44% lower YoY. Its distribution business recorded an income share of PHP1 billion, an 8% increase YoY.

Banking and Financial Services

UnionBank’s income contribution to AEV amounted to PHP1.3 billion, 23% higher than the PHP1.1 billion recorded in the same period last year.

UnionBank and its subsidiaries recorded a net income of PHP2.6 billion in the first quarter of 2020, 22% higher than the PHP2.2 billion recorded in the same period last year. This was mainly due to revenue growth from the increase in net interest income, which grew to PHP6.8 billion, 47% higher YoY.

Food

AEV’s non-listed food subsidiaries’ (Pilmico Foods Corporation, Pilmico Animal Nutrition Corporation, and Pilmico International Pte. Ltd. including Gold Coin Management Holdings Limited) income contribution to AEV amounted to PHP60 million for the first quarter of 2020, 56% lower than the PHP137 million recorded in the same period in 2019.

Pilmico International recorded net income of PHP297 million in the first quarter of 2020, a 116% increase from the same period last year. This was due to the increase in income contribution of Gold Coin Management Holdings Limited (Gold Coin) resulting from an increased equity ownership, and increased volumes from Gold Coin’s China, Vietnam, Malaysia, and Sri Lanka operations.

Gains from Pilmico International were outweighed by a net loss for Pilmico’s local subsidiaries.

Infrastructure

For the Infrastructure group, Republic Cement & Building Materials (RCBM) income contribution to AEV for the first quarter of 2020 amounted to PHP61 million, versus the PHP32 million loss recorded in the same period last year.  This was due to strong demand growth during the first two months of the year and tempered by the slowdown in construction activities in March due to the Luzon-wide ECQ.

Land

AEV’s non-listed real estate businesses, comprising AboitizLand and its subsidiaries, reported a consolidated net loss of PHP110 million for the first quarter of 2020 versus PHP44 million in losses recorded in the same period last year.

AboitizLand contributed PHP508 million in revenues for the first quarter of 2020, 24% lower than revenue contributions from the same period in 2019. This decrease was primarily due to higher forfeitures and lower construction progress resulting from the eruption of Taal Volcano and enhanced community quarantine (ECQ) due to COVID-19. Operating costs were also higher YoY.