Aboitiz Equity Ventures, Inc. Reported P11.5 Billion in Consolidated Net Income in H1-2024, Up by 10%

Aboitiz Equity Ventures Inc. (AEV) recorded consolidated net income of P11.5 billion for the first half of 2024, a 10% increase from the P10.5 billion reported for the first half of 2023. Excluding non-recurring net gain of P83 million, the Company’s core net income for the first half of 2024 was P11.4 billion, which was 2% higher than the Company’s core net income of P11.1 billion during the corresponding period in 2023.

The Company recorded consolidated net income of P6.6 billion for the second quarter of 2024, a 2% increase from the P6.5 billion reported for the second quarter of 2023. Excluding non-recurring net gain of P137 million, the Company’s core net income for the second quarter of 2024 was P6.4 billion, which was 1% lower than the Company’s core net income of P6.5 billion during the corresponding period in 2023.

Power accounted for 65% of the total net income contributions from AEV’s Strategic Business Units (SBU) for the first half of 2024, while Food and Beverage accounted for 20%. Net income contributions from Financial Services, Real Estate, and Infrastructure SBUs were at 18%, 3%, and -5%, respectively.

Strategic Business Units

Power

Aboitiz Power Corporation’s (AboitizPower) net income contribution to AEV for the first half of 2024 amounted to P9.1 billion, 2% lower than the P9.3 billion recorded in the same period in 2023.

AboitizPower’s beneficial EBITDA grew by 8% year-on-year (YoY) to P36.3 billion for the first half of 2024, mainly due to higher generation portfolio margins. AboitizPower’s net income for the first half of 2024 was P17.1 billion. Due to the recognition of depreciation and interest for GNPower Dinginin Ltd. Co.’s (GNPD) Unit 1 and Unit 2, AboitizPower’s net income for the first half of 2024 was 4% lower than its net income of P17.8 billion for the corresponding period in 2023. Excluding forex and derivative gains, AboitizPower’s core net income for the first half of 2024 would be P17.1 billion, compared to P17.8 billion in the same period last year.

AboitizPower’s generation and retail supply business beneficial EBITDA for the first half of 2024 was P33.0 billion, 10% higher than the P30.0 billion in the same period in 2023. This was mainly due to higher portfolio margins and energization of AboitizPower’s Cayanga and Laoag solar plants. Energy sold for the first half of 2024 was at 17,758 gigawatt-hours (GWh).

During the first half of 2024, AboitizPower’s distribution business beneficial EBITDA was P4.2 billion. This was 16% lower than the P5.0 billion in the same period in 2023, which was mainly the result of the favorable timing of pass through charges due to the steep decline in fuel prices in the same year. Nevertheless, energy sales increased by 9% to 3,256 GWh for the first half of 2024, compared to 2,983 GWh in the same period in 2023 due to the higher demand driven by the effect of the El Niño phenomenon. Energy sales from Residential, and Commercial and Industrial customers increased by 17% and 6% YoY, respectively.

Banking & Financial Services

Net income contribution from Union Bank of the Philippines (UnionBank) amounted to P2.5 billion for the first half of 2024. This is 23% lower than the P3.2 billion recorded in the same period in 2023.

On a stand-alone basis, UnionBank recorded a net income of P5.1 billion for the first half of 2024. This was 17% lower than the P6.1 billion recorded in the same period in 2023. Nevertheless, core operations remain healthy as the Bank’s revenues increased by 8.3% YoY to P37.3 billion for the first half of 2024. Net interest income also rose by 15% YoY to P27.5 billion for the first half of 2024 as a result of higher net interest margin of 5.7%, which was attributable to the significant growth in consumer loans. As of June 2024, consumer loans account for 60% of UnionBank’s total loan portfolio, which grew by 8% YoY for the first half of 2024.

Operating expenses were lower by 2% YoY to P21.6 billion, primarily driven by reduction in IT cost as a result of the successful migration of the acquired Citi Consumer business into the UnionBank system.

Total assets as of June 30, 2024 was P1.1 trillion. Total loans was P514.8 billion, while low-cost CASA deposits were at P427.8 billion.

Real Estate

Aboitiz Land, Inc. (AboitizLand) and its Subsidiaries reported a consolidated net income of P445 million for the first half of 2024, 14% higher than the P389 million recorded in the same period in 2023. This was attributable to higher revenues from the newly launched phases in Pristina and Priveya in 2023, along with additional revenues from higher spot sales and more units sold for the first half of 2024.

Food and Beverage

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 P2.8 billion for the first half of 2024. This is more than 15x higher than the P181 million recorded in the same period in 2023. This 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 February 23, 2024.

Infrastructure

Aboitiz InfraCapital, Inc.’s income contribution to AEV for the first half of 2024 amounted to a loss of P312 million, a reversal from the P334 million profit recorded in the same period in 2023. This was mainly the result of higher interest expense from the increased debt availments of Aboitiz InfraCapital, Inc. for its expansion.

AEV’s share in Republic Cement & Building Materials, Inc.’s (Republic Cement) loss for the first half of 2024 amounted to P407 million. This is slightly lower than its share of losses in the same period in 2023, which amounted to P452 million. Although margins improved as a result of lower costs for the first half of 2024, relative to the first half of 2023, Republic Cement still incurred a loss as sales volume and selling prices still declined YoY due to weak market demand for cement.

Financial Condition 

​As of June 30, 2024, AEV’s consolidated assets was P847.8 billion, 2% higher from year end-2023 level of P833.9 billion. Cash and cash equivalents was P73.0 billion, 35% lower from year end-2023 level of P112.3 billion. Consolidated liabilities was P468.5 billion, 2% higher from the year-end 2023 level of P458.5 billion, while equity attributable to equity holders of the parent increased by 1% at P275.2 billion from year end-2023 level of P272.0 billion. AEV’s current ratio as of June 30, 2024 stood at 1.9x while its net debt-to-equity ratio was 0.8x.