MANILA, Philippines – Aboitiz Equity Ventures is well positioned to participate in the government’s infrastructure projects following its acquisition of Republic Cement, COL Financial said.
In its report on AEVs first half earnings, COL said it has a hold rating on AEV.
“We like AEV given the expansion plans of its power subsidiary AboitizPower and food subsidiary Pilmico Foods,” COL said.
It said better than expected earnings from banking and food businesses offset weaker than expected real estate performance.
AEV reported that it ended the first half of the year with a consolidated net income growth of 34 percent to P10.5 billion from P7.8 billion.
Power accounted for 67.1 percent followed by banking and financial services, food, infrastructure and land strategic business units with income contributions of 16.8 percent, 7.8 percent, 7.6 percent and 0.7 percent, respectively.
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Republic Cement and Building Materials Inc. (RCBM), posted an income contribution of P869 million during the period.
“RCBM had a strong performance in the first half of 2016 with cement demand supported by growth in commercial and other non-residential spaces, sustained demand in the residential sector and sustained government infrastructure spending,” it said.
AEV president and chief executive officer Erramon Aboitiz said the company’s two-pronged strategy of organic growth in its existing businesses and diversifying its income streams from its fifth leg – infrastructure-related businesses – is on track and paying off.
“We are very pleased with the strong contribution of our cement business and the prospects of infrastructure moving forward,” Aboitiz said.
COL said AEV is indeed well positioned to participate in the government’s infrastructure projects because of its newly acquired cement business as well as its strong balance sheet and excellent track record in acquiring businesses.