Home Economy Aboitiz Equity Ventures income down 2% in 2023

Aboitiz Equity Ventures income down 2% in 2023


CEBU-BASED Conglomerate Aboitiz Equity Ventures, Inc. (AEV) saw its consolidated net income for 2023 fall by 2% to P23.5 billion from the previous year, reflecting mixed results across its business units.

AEV’s core net income last year, excluding the nonrecurring net gains of P1.4 billion, rose by 8% to P22.1 billion, the conglomerate said in a regulatory filing on Tuesday.

In the fourth quarter, AEV recorded a net income of P5.5 billion, marking a 108% increase from P2.7 billion in 2022. The company’s earnings before interest, tax, depreciation, and amortization (EBITDA) also rose by 12% to P19.3 billion.

Among its businesses, the power segment had the highest net income contribution in 2023 at 67%, followed by financial services at 18%, infrastructure at 6%, food at 5%, and real estate at 4%.

Aboitiz Group President and Chief Executive Officer (CEO) Sabin M. Aboitiz said that 2024 will be a “transformative year” for the conglomerate and its business units.

“Our acquisition of Coke’s bottling operations with our partner Coca-Cola Europacific Partners accelerates our diversification into the consumer market. And the recently announced investment of AboitizPower in gas projects with Metro Pacific Investments Corp. and San Miguel Global Power diversifies our energy mix as we transition to cleaner energy,” he said.

AEV’s Aboitiz Power Corp. (AboitizPower) posted a net income contribution of P17.3 billion in 2023, a 28% increase from P13.5 billion the previous year.

AboitizPower’s generation and retail supply business saw a 20% growth in its 2023 EBITDA to P61.3 billion due to fresh contributions from GNPower Dinginin Ltd. Co. and higher availability across the company’s power generation portfolio.

“Energy volume sold in 2023 increased by 17% to 35,372 gigawatt-hours (GWh), compared to 30,251 GWh in 2022,” AEV said.

The company’s distribution business had an 8% jump in EBITDA to P8.7 billion from P8 billion. Energy sales volume climbed by 6% to 6,157 GWh.

“Energy sales to residential customers increased by 8% year on year, while sales to commercial and industrial customers also increased by 6% year on year, primarily due to recoveries in demand in the areas affected by Typhoon Odette and resurgence of energy sold back to pre-pandemic level,” AEV said. 

On its banking and financial services unit business, AEV said that Union Bank of the Philippines had a 29% drop in its 2023 net income contribution to P4.5 billion.

On a standalone basis, UnionBank and its subsidiaries had a P9.2 billion net income in 2023. The bank’s net revenues rose by 36% to P70.8 billion.

“UnionBank’s non-interest income was P18.8 billion, 41% higher year on year, driven by fee-based income, which grew by 54% to P10.4 billion. The growth in fees was mainly a result of growing customer transactions such as bills payments, funds transfers, interchange, and other card-related fees,” AEV said. 

AEV’s Aboitiz InfraCapital, Inc. had a 26% increase in its 2023 net income contribution to P2.4 billion led by higher land sales and lease income from its economic estates and incremental contributions from the airports business segment.

However, the share of AEV in Republic Cement & Building Materials, Inc.’s loss in 2023 reached P789 million, more than double the P323 million loss recorded in 2022 due to lower sales volume caused by weak market demand for cement.

The demand was hampered by higher inflation, delays in the rollout of government projects, and unfavorable weather conditions in the Visayas and Mindanao regions at the beginning of 2023, the company said.

For its food segment, AEV’s subsidiaries, including Pilmico Foods Corp., Pilmico Animal Nutrition Corp., and Pilmico International Pte. Ltd., contributed P1.3 billion to the conglomerate’s net income in 2023, a turnaround from the P14 million loss in 2022.

“This reversal was primarily due to better margins from its flour and agribusiness segments driven by the decrease in raw material costs and better pricing strategy. These gains were partially offset by the lower contributions from the farms and meats segments, which was dragged down by the lower selling prices for both live hogs and meats combined with higher production costs pertaining to the carrying costs of underutilized farms,” AEV said. 

AEV’s real estate businesses, comprising Aboitiz Land, Inc. and its subsidiaries, saw a 19% increase in consolidated net income to P1 billion in 2023.

“This was attributable to higher revenues from higher sales performance and construction activity, coupled with gains from sale of properties,” AEV said.

AIRPORTMeanwhile, the conglomerate said in a separate statement on Tuesday that the Mactan-Cebu International Airport secured a Level 1 airport carbon accreditation from Airports International Council.

The airport is operated by Aboitiz Infracapital GMR Megawide Cebu Airport Corp. The conglomerate said that Mactan-Cebu International Airport is the first Philippine airport to secure the distinction.

The Airport Carbon Accreditation is a globally endorsed certification program for carbon management in airports. It autonomously evaluates and acknowledges airports’ efforts in managing and reducing their carbon emissions.

“We take great pride in the global recognition of our initial strides toward becoming a more sustainable airport. As the pioneering airport in the Philippines acknowledged for its sustainability endeavors, we aspire to set a precedent for others in the aviation industry in the country to embrace similar practices,” Mactan-Cebu International Airport CEO Athanasios Titonis said.

“Understanding that achieving Carbon Neutrality is a journey that requires time and dedication, we are fully committed to innovating new methods to further diminish our carbon emissions” he added.

On Tuesday, AEV shares fell by 1.11% or 0.55 centavos to P49 apiece; UnionBank shares dropped by 0.45% or 20 centavos to P44 per share; while AboitizPower stocks rose by 0.8% or 30 centavos to P37.80 each. — Revin Mikhael D. Ochave

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