AEV 2020 earnings down

Published March 15, 2021, 7:00 AM

by James A. Loyola

Aboitiz Equity Ventures Inc. reported a 30 percent drop in consolidated net income to P15.4 billion last year from P22.0 billion in 2019 but registered a year-on-year growth for the fourth quarter.

Aboitiz Logo (via Bulletin)
Aboitiz Logo (via Bulletin)

In a disclosure to the Philippine Stock Exchange, AEV said it recognized non-recurring losses of P477 million during 2020 versus the P516 million in non-recurring gains recorded in 2019.

Without these one-off losses, AEV’s core net income for 2020 was P15.9 billion, 26 percent lower than the P21.5 billion recorded in 2019. 

For the fourth quarter, AEV posted a consolidated net income of P7.1 billion last year 2020, a 13 percent increase from the P6.3 billion reported in the same period of 2019.

The Company recognized non-recurring net losses of P472 million during the period, compared to the P671 million in non-recurring net gains for the corresponding period in 2019.

Without these one-off losses, AEV’s core net income for the fourth quarter of 2020 was P7.6 billion, a 34 percent jump YoY.

Power accounted for 52 percent of the total income contributions from AEV’s Strategic Business Units (SBU) in 2020, while Financial Services accounted for 32 percent.

Income contributions from Food, Infrastructure, and Real Estate SBUs were at 12 percent, 2 percent, and 2 percent, respectively. 

“In 2020, the Aboitiz Group, like all other business organizations in our country, faced not only the unprecedented challenges brought on by the COVID-19 pandemic but the normal run-of-mill issues that normal times bring,” Aboitiz Group President Sabin M. Aboitiz said.

He said AEV’s business units stayed focused on ensuring the delivery of uninterrupted vital services to customers and communities.

However, Aboitiz noted that, “Careful consideration of our future growth led us to significantly reduce our capital expenditure budgets and prioritize essential projects supported by our strong balance sheet.”

Aboitiz Power Corporation’s net income contribution to AEV for 2020 was P9.7 billion, 27 percent lower compared to the P13.3 billion recorded in the previous year. 

The income contribution of Union Bank of the Philippines to AEV for 2020 amounted to P5.9 billion, 18 percent lower than the P7.2 billion recorded in the previous year.

UnionBank and its subsidiaries recorded net income of P11.6 billion in 2020, 18 percent lower than the P14.0 billion recorded in 2019 mainly due to higher provisions for loan losses for 2020.

AEV’s non-listed food subsidiaries’ (Pilmico Foods Corporation, Pilmico Animal Nutrition Corporation, and Pilmico International Pte. Ltd. – which includes Gold Coin Management Holdings Pte. Ltd.) income contribution to AEV amounted to P2.2 billion for 2020, 38 percent higher than the P1.6 billion recorded in 2019.

AEV’s real estate businesses, comprising AboitizLand, Inc. and its subsidiaries, reported a consolidated net income of P338 million for 2020, 64 percent lower than the P943 million in income recorded the previous year.

This was primarily due to the absence of fair valuation gains on investment properties recognized in 2019, which were not present in 2020.

For the Infrastructure group, Republic Cement & Building Materials, Inc. reported a net income of P590 million to AEV for 2020, 4 percent lower compared to the P612 million in net income recorded in 2019.

This was mainly due to the contraction in the demand for cement as construction activities significantly slowed down, particularly during the enforcement of COVID-related community quarantines.