MANILA, Philippines – Lower selling prices of electricity and the revaluation of its dollar-denominated liabilities resulted in lower earnings for conglomerate Aboitiz Equity Ventures Inc. (AEV).
In a regulatory filing, AEV said its third quarter consolidated net income sank 25 percent to P4.6 billion from a year ago.
AEV said it incurred a non-recurring loss of P119.7 million in the July to September period due to the revaluation of dollar-denominated liabilities and placements.
But it was partly offset by the reversal of a previous impairment provision related to the sale of a stake in an associate, as well as AEV’s share in its power unit’s one-time gain from the redemption of shares.
“Adjusting for these, AEV closed the quarter with a core net income of P4.7 billion, down 25 percent year-on-year,” the holding firm said. In the third quarter, the power business accounted for 80 percent of earnings, followed by banking at 12 percent, food at seven percent and real estate at one percent.
For the nine-month period, AEV’s consolidated net income slipped eight percent to P16.6 billion from P18 billion.
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Power accounted for 71 percent of income, followed by the banking, food and property at 22 percent, six percent and one percent, respectively.
“We remain pleased with the performance of our business units. Our challenge in the coming years is to deploy the cash flow we are generating into ventures that meet our hurdle rates,” said AEV president and CEO Erramon Aboitiz.
Adjusting for non-recurring items, AEV’s core net income fell seven percent to P16.4 billion year-to-date.
Power generation unit Aboitiz Power Corp. contributed P11 billion to AEV’s earnings, down 22 percent from last year’s P14.1 billion.
“The group’s average price for its power decreased by 12 percent year-on-year during the first nine months of 2013,” AEV said.
“This was due to the year-on-year decline in both the average selling price of electricity sold to the spot market and average selling price under bilateral contracts of 23 percent and 10 percent, respectively,” it added.
AboitizPower’s attributable net generation for the period grew four percent to 8,245 gigawatt-hours (gwh) from 7,903 gwh due to the increase in demand brought about by the hotter weather during the summer months.