Aboitiz Equity Ventures, Inc. Ended Q12024 with P4.9 Billion in Consolidated Net Income

In the first quarter of 2024, Aboitiz Equity Ventures Inc. (AEV) reported consolidated net income of P4.9 billion, a 22% increase over the P4.0 billion reported in the same period the previous year. With a non-recurring net loss of P54 million subtracted, the company's core net income for the first quarter of 2024 was P5.0 billion, an increase of 8% over the P4.6 billion earned during the same time in 2023. 

In the first quarter of 2024, AEV's Strategic Business Units (SBU) contributed 67% of the total net income, with Financial Services contributing 16%. The real estate, infrastructure, and food and beverage SBUs contributed net income at rates of 15%, 5%, and -3%, respectively.

“The first quarter of the year has been an exciting one for the Aboitiz Group, as we continue to build on our strong foundation of sustainable growth. With the successful acquisition of the Coca-Cola business, we are well-positioned to capitalize on new opportunities and expand our reach in the market. Our financial performance this quarter reflects the hard work and dedication of our team, and we look forward to continued success in the months ahead,” said Aboitiz Group President and CEO Sabin M. Aboitiz.

Strategic Business Units

For the first quarter of 2024, Aboitiz Power Corporation (AboitizPower) contributed P4.2 billion in net income to AEV, a 7% increase over the P3.9 billion reported during the same period in 2023.

AboitizPower's core net income for the first quarter of 2024 was P7.8 billion, 3% more than the P7.6 billion reported in 2023 when considered separately. Its first-quarter 2024 reported net income of P7.9 billion was P4% more than its 2023 reported net income of P7.5 billion. 

In the first quarter of 2024, AboitizPower's retail supply and generating business reported P13.8 billion in EBITDA, which was P3.1 billion during the same period in 2023. This is a 5% increase. Compared to 8,725 gigawatt-hours (GWh) in the same period in 2023, energy sales climbed by 1% to 8,812 GWh in the first quarter of 2024. Higher portfolio margins and the introduction of the new reserves market were the main causes of the improvement in EBITDA.

AboitizPower's distribution business reported P2.6 billion in EBITDA for the first quarter of 2024, 11% less than P2.9 billion for the same period in 2023. Due to higher demand brought on by the El Niño phenomenon, energy sales climbed by 9% to 1,526 GWh in the first quarter of 2024 from 1,404 GWh at the same time in 2023. Residential, commercial, and industrial customers saw increases in energy sales of 15% and 6%, respectively. The favorable timing of pass-through charges, however, was countered by the drop in fuel costs in the first quarter of 2023. 

The net income contribution to AEV by Union Bank of the Philippines (UnionBank) in the first quarter of 2024 was P978.3 million, which is 44% less than the P1.8 billion reported in the same period in 2023.

On a stand-alone basis, UnionBank and its Subsidiaries recorded a net income of P2.0 billion in the first quarter of 2024. Net interest income reached P13.4 billion or 17% higher year-on-year (YoY) as a result of the 14% YoY increase in net revenues to P18.4 billion and the Bank’s higher net interest margin of 5.7% in the first quarter of 2024, versus 5.1% in the same period in 2023. The higher margin was attributable to the remarkable growth in consumer loans, which grew by 12% YoY. The Bank’s consumer loans now account for 59% of total loan portfolio, which grew by 3% YoY in the first quarter of 2024. Non-interest income was up by 6% to P4.9 billion driven by fees, ROPA, forex gains and other income.

Operating expenses were up by 10% to P11.1 billion, primarily driven by marketing expenses related to new customer acquisition and higher IT related expenses on account of the Citi integration.

Total assets as of March 31, 2024 was P1.1 trillion. Total loans reached P520.7 billion, while low-cost CASA deposits were at P429.8 billion.

Aboitiz Land, Inc. (AboitizLand) and its Subsidiaries reported a consolidated net income of P280 million in the first quarter of 2024, more than double the P127 million recorded in the same quarter in 2023. This was attributable to higher revenues generated mainly by the newly launched phases in Pristina and Priveya in 2023, along with additional revenues from higher spot sales in 2024.

Aboitiz InfraCapital, Inc.’s income contribution to AEV in the first quarter of 2024 amounted to P72 million, an 81% decline from the P375 million recorded in the same quarter in 2023. This was mainly the result of higher interest expense from Aboitiz InfraCapital, Inc.’s increased debt availments for its expansion.

​AEV’s share in Republic Cement & Building Materials, Inc.’s (Republic Cement) loss in the first quarter of 2024 amounted to P228 million, lower than the P296 million loss recorded in the same period in 2023. Although margins slightly improved as a result of lower costs in the first quarter of 2024, relative to the first quarter in 2023, Republic Cement still incurred a loss as sales volume and selling prices still declined YoY due to weak market demand for cement.

Net income contribution from the Food and Beverage segment, which includes Pilmico Foods Corporation, Pilmico Animal Nutrition Corporation, and Pilmico International Pte. Ltd. (which houses Gold Coin Management Holdings Pte. Ltd.) (collectively, the Food Group), and Coca-Cola Beverages Philippines, Inc. (CCBPI), was P935 million in the first quarter of 2024, a reversal from the P534 million loss recorded in the same period in 2023. This reversal was primarily driven by the Food Group’s Flour and Agribusiness divisions, which continued to benefit from stabilizing commodity prices and strategic selling prices adjustments, and fresh contributions from CCBPI, which AEV acquired on 23 February 2024.

As of March 31, 2024, AEVs consolidated assets totaled P833.9 billion, flat from year end-2023 level. Cash and cash equivalents was P85.1 billion, 24% lower from year end-2023 level of P112.3 billion. Consolidated liabilities totaled P465.3 billion, 1% higher from the year-end 2023 level of P458.5 billion, while equity attributable to equity holders of the parent decreased by 1% at P270.4 billion from year end-2023 level of P272.0 billion. AEV’s current ratio as of March 31, 2024 stood at 2.0x while its net debt-to-equity ratio was 0.8x.