Aboitiz Equity Ventures' earnings dip due to forex movements

The Aboitiz Group’s investment arm Aboitiz Equity Ventures Inc. (AEV) reported a two percent dip in consolidated net income to P23.5 billion last year from the P24 billion earned in 2022 due to one-time gains. 

In a disclosure to the Philippine Stock Exchange (PSE), AEV said that, excluding non-recurring net gains of P1.4 billion, the company’s core net income for 2023 was P22.1 billion, which was eight percent higher than the company’s core net income of P20.5 billion for 2022.

AEV’s net income for the fourth quarter of 2023 of P5.5 billion was 108 percent higher than the P2.7 billion reported in 2022. 

Excluding non-recurring net gains of P688 million during the period, which was mainly attributable to foreign exchange gains arising from the revaluation of US dollar cash and liquid financial instruments, the company’s core net income for the fourth quarter of 2023 was P4.8 billion, which was 10 percent higher year-on-year (YoY). 

Power accounted for 67 percent of AEV’s total net income in 2023, while Financial Services accounted for 18 percent. Net income contributions from Infrastructure, Food, and Real Estate Strategic Business Units (SBUs) were at six percent, five percent, and four percent, respectively.

“Building on our resilience and steady core performance, we are ready for another exciting phase of growth and innovation," said Aboitiz Group President and CEO Sabin M. Aboitiz. 

He noted that, “our acquisition of Coke’s bottling operations with our partner Coca Cola European Partners (CCEP) accelerates our diversification into the consumer market. And the recently announced investment of AboitizPower in gas projects with Metro Pacific Investments Corporation (MPIC) and San Miguel Global Power (SMGP) diversifies our energy mix as we transition to cleaner energy.”

“We are confident that 2024 will be a transformative year for AEV and its business units,” said Aboitiz.

Net income contribution of Aboitiz Power Corporation to AEV in 2023 amounted to P17.3 billion, 28 percent higher than the P13.5 billion in 2022 while net income contribution from Union Bank of the Philippines to AEV in 2023 amounted to P4.5 billion, 29 percent lower than the P6.3 billion in 2022.

Aboitiz InfraCapital Inc. contributed P2.4 billion to AEV’s bottomline, 26 percent higher than the P1.9 billion in 2022, due to higher land sales and lease income from AIC’s Economic Estates and incremental contributions from the airports business segment.

AEV’s share in Republic Cement & Building Materials Inc.’s loss in 2023 amounted to P789 million, more than double the P323 million loss recorded in 2022. 

This was due to lower sales volume attributed to weak market demand for cement primarily due to higher inflation, delays in the rollout of government projects, and unfavorable weather conditions in the Visayas and Mindanao regions at the beginning of 2023.

Net income contribution from AEV’s food subsidiaries, which include Pilmico Foods Corporation, Pilmico Animal Nutrition Corporation, and Pilmico International Pte. Ltd. (which houses Gold Coin Management Holdings Pte. Ltd.), was P1.3 billion in 2023, a reversal from the P14 million loss recorded 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’s real estate businesses, consisting of Aboitiz Land Inc. reported a consolidated net income of P1 billion in 2023, 19 percent higher than the P865 million recorded in 2022 due to higher revenues from higher sales performance and construction activity, coupled with gains from sale of properties.