Aboitiz Equity Ventures, Inc.
...di ko alam prospects sa power industry

AEV profit dips 7% in 1st quarter

ABOITIZ EQUITY Ventures, Inc. (AEV) reported a 7% slide in first-quarter net income to P4.7 billion as one-off foreign exchange losses dampened the holding firm’s financial showing during the period.

AEV told the stock exchange on Thursday that it recorded nonrecurring losses of P442 million -- against gains of P186 million last year -- after it recognized losses when it revalued dollar-denominated liabilities and mark-to-market losses on derivatives.

Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) increased by 14% to 12.7 billion. Core net income, considering higher income contributions from associates, rose by 5% to P5.1 billion from P4.9 billion.

The firm’s power business accounted for 67% of earnings from strategic business units. Financial services was a distant second with a contribution of 22%, followed by food with 6%, infrastructure with 4% and real estate with 1%.

Aboitiz Power Corp. posted a 13% drop in net income to P4.4 billion during the January to March period, due to one-time foreign exchange losses, coupled with the near-flat electricity sales.

The power unit’s income contribution to AEV decreased by 13% to P3.4 billion from P3.9 billion previously.

Nonrecurring losses of P577 million were incurred from foreign exchange costs after the revaluation of dollar-denominated debts and derivatives. The losses compare with gains of P242 million during the same period in 2016.

Core net income rose by 4% to P5 billion from P4.8 billion, a growth narrowed by higher interest expense and depreciation, AboitizPower said. Beneficial earnings before interest, tax, depreciation and amortization (EBITDA) increased by more than 13% to P10.8 billion from P9.5 billion.

AboitizPower’s power generation business recorded a beneficial EBITDA increase of 14% to P9.2 billion from P8.1 billion because of the strong performance of its hydropower units and new contributions from GNPower Mariveles Coal Plant Ltd. Co.

“Increased interest expense and depreciation from the initial take up of GNPower-Mariveles costs, narrows the growth at the core net income level to 5%,” the company said.

However, the nonrecurring foreign exchange losses pulled down the business group’s net income by 15% to P3.6 billion.

AboitizPower’s attributable net energy sold remained flat year on year to 3,448 gigawatt-hours (GWh) from 3,451 GWh after the outages of Therma South, Inc. along with the lower dispatch from oil-fired units and the lower steam supply affecting the Tiwi plant output as it continues to recover from the effects of typhoon Nina.

“Our distribution units continue to grow, riding on the expanding economy, renewed confidence in our government and the continued influx of investments into our distribution areas,” said Antonio R. Moraza, AboitizPower, president and chief operating officer, in a statement.

The power distribution group’s gross margin on a per kilowatt-hours basis for the period increased to P1.59 from P1.46 in the first quarter of 2017, the company said. It attributed the improvement to the decline in operating costs due to lower dispatch of Davao Light & Power Co., Inc.’s Bajada power plant.

“Further, improving margins were better recoveries on purchased power costs,” it said.

AboitizPower’s attributable sales for the period was at 1,208 GWh, which was flat from a year ago.

Meanwhile, AEV’s banking business contributed P1.1 billion to the firm, a 30% increase from P837 million a year ago.

UnionBank and its subsidiaries recorded a net income of P2.2 billion, up 27% compared with P1.7 billion in the same period last year.

“The increase in net income was largely in view of the sustained growth in recurring income, coupled with trading profits. The strong earnings performance translated to a return on equity and return on average assets of 15.1% and 1.8%, respectively,” AEV said.

AEV’s 100%-owned food subsidiaries’ Pilmico Foods Corp., Pilmico Animal Nutrition Corp. and Pilmico International Pte Ltd. contributed P292 million, down 25% from P389 million a year ago.

Real estate subsidiary Aboitiz Land, Inc. recorded a net income of P72 million, higher by 46% compared last year’s P50 million. The increase was largely attributed to “higher revenue recognition by the industrial business unit, and improved sales and construction progress by the residential business unit.”

Infrastructure unit Republic Cement and Building Materials, Inc. contributed P391 million, down 48% from P202 million.

“Cement demand slowdown was experienced in the first quarter of 2017, as compared to the same period last year when there was strong demand due to the election season,” AEV said.


...eto nga pala yung food/feeds business ng mga Aboitiz Tongue

AEV’s Pilmico acquires Vietnam’s Eurofeed

PILMICO International Pte. Ltd., a subsidiary of Aboitiz Equity Ventures, Inc. (AEV), acquired 70% of the outstanding shares of Vietnam animal feeds company Europe Nutrition Joint Stock Co., also known as Eurofeed.

The transaction was for $3.2 million, and ownership was formally transferred on Sept 27 in Ho Chi Minh City.

Aboitiz also officially announced that the company has changed its name to Pilmico Animal Nutrition Joint Stock Co.

Sabin M. Aboitiz, Pilmico President and Chief Executive Officer, said in a statement: “We are celebrating another milestone for the Aboitiz Group, particularly for Pilmico, as it embarks on another international venture. Despite foreseen market challenges, Vietnam remains a strategic country for Pilmico, given its strong economy, a promising livestock industry and access to potential export markets.”

In July 2014, Pilmico acquired a 70% stake in Vietnamese aqua feed firm, Vinh Hoan Feeds, based in Dong Thap.

Pilmico International is one of the three AEV food subsidiaries. The other two are Pilmico Foods Corp. and Pilmico Animal Nutrition Corp.


#93 losses

Aboitiz Equity’s bottom line dented by forex losses

FOREIGN EXCHANGE losses weighed on the earnings of Aboitiz Equity Ventures, Inc. (AEV) in the third quarter, according to a disclosure to the stock exchange on Wednesday.

The holding firm of the Aboitiz family delivered a consolidated net income of P5.6 billion in the July to September period, down 14% from P6.6 billion in the same period last year.

AEV widened its non-recurring losses to P720 million from P117 million a year ago stemming from the recognition of forex losses upon revaluation of dollar-denominated liabilities and pre-termination costs on the refinancing of a subsidiary’s debt.

Without the one-off losses, the quarterly core net profit was 5% lower year on year to P6.4 billion from P6.7 billion.

As a result, AEV’s net income from January to September slid to P15.9 billion, down 7% from P17.1 billion a year ago, as the strength of its power business failed to offset the impact of forex losses and the weakness of its banking, food and infrastructure units.

Excluding extraordinary items, core net earnings remained almost flat at P17.1 billion.

In a separate statement, Aboitiz Power Corp. said it netted P15.7 billion in the first nine months of the year, an improvement of 4% from a year ago due to fresh contributions from the GNPower Mariveles Coal Plant Ltd. Co. thermal power plant and the strong performance of its various hydro power plants.

Without nonrecurring losses, core net income grew 15% to P17.5 billion from P15.2 billion.

“The significant growth in our generation business highlights our balanced strategy as both our renewable and thermal plants contributed to our nine-month performance…,” said Antonio R. Moraza, AboitizPower president and chief operating officer.

The contribution of AboitizPower to AEV rose 4% year on year to P12.1 billion from P11.6 billion.

Meanwhile, Union Bank of the Philippines’ income share to AEV declined 21% to P3.1 billion from P4 billion.

On a stand-alone basis, UnionBank and its subsidiaries netted P6.4 billion, down 22% compared to the P8.1 billion earned in the same period last year.

Excluding securities trading gains, the bank’s earnings grew 44% to P6.1 billion from P4.3 billion.

The Pimlico Group’s share to AEV’s earnings dropped 14% to P1.2 billion from P1.4 billion due to lower margins and higher operating costs seen by the feeds and flour business.

Real estate arm AboitizLand, Inc. saw 128% boost in net income to P340 million on the back of higher sales by the industrial business unit and notable sales and construction progress by the residential business segment.

A slowdown in cement demand significantly pulled down Republic Cement and Building Materials, Inc.’s income contribution to AEV by 80% to P249 million from P1.3 billion last year when sales got a boost from the election season.


...lugi semento business katulad ni CHP Tongue lahat umaasa sa Build Build Build next year

AEV pins hopes on gov’t projects to lift cement sales

ABOITIZ EQUITY Ventures, Inc. (AEV) is banking on the implementation of the government’s infrastructure projects to boost its cement business in 2018, as the segment suffered from lower volumes and increased competition during the first nine months of 2017.

Republic Cement and Building Materials, Inc., under AEV’s infrastructure arm Aboitiz InfraCapital, experienced an 80% drop in earnings in the January to September period to P1.3 billion. Aboitiz InfraCapital Sabin M. Aboitiz noted earnings will remain flattish for the rest of the year, with a turnaround expected next year.

“We had new domestic competition also, those two things brought the prices to where they are today. Next year we believe the volume will grow, that the DTI (Department of Trade and Industry) DAO (Department Administrative Order) will be implemented, and the build program of the government will start. With those three issues then we will have the volume growth,” Mr. Aboitiz, who also sits as AEV’s chief operating officer, said in a press conference late Wednesday.

The Duterte administration has committed P8 trillion in both public and private spending until 2022 to construct roads and railways, among others. The plan looks to place infrastructure spending at 5.3% of the economy in 2017, and then up by 7% by 2022.

AEV is also in the process of increasing its cement capacity by a million tons in the next three to five years. The increase will be done in two phases, starting with the debottlenecking of its existing six plants in the country to maximize production. The second phase will involve the actual construction of a plant that produces both clinker and cement.

Mr. Aboitiz noted expanding clinker capacity would help bring down costs as opposed to importing the material from other countries.

“Those with clinker capacity actually has lower costs. We only have 4 million tons with clinker capacity out of our total of 7.5 million. So we’re gonna increase the clinker capacity. We’re deciding whether to make it in Iligan first or Bulacan,” Mr. Aboitiz said.

Asked on the other factors that would boost cement demand should the government experience delays in its infrastructure program, Mr. Aboitiz said construction from private businesses will drive growth.

“Residential is still very strong, we feel that next year residential will be very strong. But still the NHA (National Housing Authority) program, the government has talked about housing, there are big requirements,” Mr. Aboitiz told reporters.

On the company’s other plans for infrastructure, the executive noted their focus remains to be in airports.

“The small airports we are waiting for a clarification from the government whether they’re going to make it unsolicited or solicited actually, so we’re very interested in airports,” Mr. Aboitiz said.

The group said it is also willing to assist the government in rebuilding Marawi, which the government has just declared free from terrorist influence.

“Our cement plant is 30 kilometers away from there. So we feel like we have a role to play, be it with contractors, we’ll bid for supply of materials for example. We plan to do that when the plan is there, but of course we need to see what the government’s plan is,” Mr. Aboitiz said.


...Pilmico news

Aboitiz food unit investing P1.7 B for feeds plants

Pilmico Foods Corp., the food unit of conglomerate Aboitiz Equity Ventures Inc., will likely invest P1.7 billion over the next three years in a bid to ramp up its foothold in the local feeds industry.

Pilmico assistant vice president Roderick dela Cruz said bulk of the budget will be earmarked for the construction of two additional plants here and another in Iligan City which will cost approximately P500 million each. The balance will be used for other expenses such as technology.

“Our current total combined production is 113 metric tons (MT) (for both plants) per hour and by the next three years, we will hike that to 153 MT,” Dela Cruz said in a briefing yesterday.

As both Pilmico feed mill plants have reached 85 percent capacity, the next plan in order to maximize operations is to build new plants, he said.

“Our direction is to protect our market, grow our business and be the one stop shop and total provider for feeds, as well as grow our customer base in ASEAN,” Dela Cruz said.

While Pilmico is yet to export its feeds, Dela Cruz said that it is part of the plan but local consumption will remain its top priority for next year.

Business ( Article MRec ), pagematch: 1, sectionmatch: 1
Pilmico aims to increase its foothold in the feeds industry by growing animal-feeds related businesses in the Philippines and export its feed products in Vietnam, Indonesia and the Pacific.

Last year, global feeds production increased four percent to reach 1.03 billion MT led by the poultry sector taking up 40 percent of total. In the Philippines alone, there are 489 feed mills, majority of which are in Luzon.


...aba meron na ring mall project si Aboitiz?

AboitizLand to open The Outlets discount mall in Batangas next year

AboitizLand, the new property arm of Aboitiz Equity Ventures Incorporated, will kick-start its commercial interests in Luzon by launching an outlet mall in Batangas.

Called The Outlets, the mall will feature discount shopping all year round on a 9.3-hectare development within the Lima Technology Center in the Lipa-Malvar area of Batangas.

The Outlets will have close to 30,000 square meters (sqm) of gross leasable area.

Its general manager, Eduardo Aboitiz, said they hope to open Phase 1 by April 2018.

"We want to offer something different to the Batangas public. We're trying to deviate from the traditional box-type mall and offer open spaces and something for everybody to appreciate. We're also going to have a multi-sport field as well as events on weekends," he said in a recent event.

Aboitiz added that both international and local brands will be offered.

"It's a mix, yes, we will have international brands but we also want local brands because this is for the local catchment area, this is for Batangas, so we also want to showcase what Batangas has to offer. We feel that this specific area is an underserved market considering that the catchment area only has 2 or 3 malls and no mall with this type of configuration," he explained.

Phase 1, according to Aboitiz, will offer 140 leasable spaces which will house restaurants and premium brands at reduced price points.

The firm said it positioned The Outlets to complement its existing mixed-use development project in the area which so far has an economic zone, as well as a multi-sport field and a hotel.

The project, it added, is also expected to generate at least 700 jobs on top of the existing 60,000 workforce inside the economic zone.

Majority of AboitizLand's projects are in Cebu but it has made headway in Luzon through its properties in Batangas in recent years.

Aside from the Lima Technology Center, AboitizLand launched its first Luzon-based residential venture, the 43-hectare Seafront Residences in San Juan, Batangas, last March.

Batangas, along with neighboring provinces Cavite and Laguna, is one of the high-growth areas outside Manila. It is expected to benefit from infrastructure projects such as the Cavite-Laguna Expressway (CALAX) and the South line of the Philippine National Railways (PNR) extension.


Ayala, Aboitiz groups OK financing deal for $1.7-B Bataan power plant project

The Ayala and Aboitiz groups yesterday said they had reached financial closing for their joint venture, the second generator of the $1.7-billion GNPower Dinginin Ltd. Co.’s (GNPD) supercritical coal-fired power plant in Bataan.

Project officials earlier said they were intending to borrow up to $1 billion to fund the construction of the first unit, which started last January.

“The estimated project cost of the GNPD project is $1.7 billion, with the debt component to be provided by Philippine banks,” the parent firms said in their disclosures.

Supercritical power plants are among coal-fired facilities that use “high efficiency, low emission” technologies, which means they harness more heat out of coal compared to conventional coal-fired plants.

“The GNPD project will support the increasing electricity demand of Luzon and Visayas. Construction of the first unit is scheduled for completion by 2019, with the second unit scheduled for completion by 2020,” they added.

Both the Ayala group’s AC Energy Holdings Inc. and Therma Power Inc.—a unit of Aboitiz Power Corp.—say they have a 50-percent economic stake in GNPD, but they have a third partner, Nauru-based Power Partners Ltd. Co.

GNPD signed on Dec. 5 the amended engineering, design, procurement, and construction contracts with Shanghai Electric Power Construction Co. Ltd. and Power Construction Corp. of China Ltd.

GNPD Unit 2 would bring the company’s attributable capacity to over 1,600 MW.

The financial closing brought AC Energy closer to attaining its 2020 goal of reaching 2,000 MW attributable capacity of power plants that are operational or under construction.

“GNPD’s contribution also addresses supply requirements in the 2020s, amidst medium term supply uncertainties in the power sector,” said AC Energy president and chief Eric T. Francia said.


Aboitiz Construction tapped for PRII project

PHILIPPINES RESINS Industries, Inc. (PRII) has tapped the construction arm of the Aboitiz Group to undertake the expansion of its polyvinyl chloride (PVC) resin plant in Bataan. In a statement issued on Thursday, Aboitiz Construction, Inc. (ACI) said it has signed a memorandum of agreement with PRII for the project that would double the capacity of the latter’s plant to 200,000 metric tons per year.

The resin plant expansion will include the structural, mechanical, piping, and civil works components, and expected to be finished in 18 months.

“In so doing, PRII will be able to better serve the domestic market,” ACI said.

In statement by PRII released in January this year, the company said it will be spending $44 million for the expansion of its plant in Bataan.

“Upon completion in December 2018, the new facilities are expected to add 110,000 metric tons a year to and thereby double PRII’s PVC production capacity, further strengthening its reliability as a PVC supplier in the Philippine market,” PRII said in a statement posted on its Web site earlier this year.

PRII is part of the Tosoh Corp. Group of Japan that started operations in January 1999. Its Bataan plant is the company’s only manufacturing facility in the country, which it uses to meet the demand of local PVC product manufacturers, according to its Web site.

The partnership marks the second time that the two companies have teamed up, as ACI also constructed PRII’s plant in 1998, at the time when ACI was still known as Metaphil.

ACI forms part of the Aboitiz Group of Companies, which has core investments in power distribution, generation, and retail electricity supply, financial services, food manufacturing, real estate, infrastructure, and portfolio investments — all held under Aboitiz Equity Ventures, Inc. (AEV).

AEV posted a 6.9% decrease in attributable profit to P15.9 billion in the first nine months of 2017, amid a 27% increase in gross revenues for the period to P111.48 billion.


Aboitiz Equity to set aside up to P50-B capex

ABOITIZ EQUITY Ventures, Inc. (AEV) may set aside between P40 to P50 billion in capital expenditures for 2018, with its power unit cornering the bulk of the spending as it completes several power projects next year.

“Probably P40 to P50 billion, overall. Not just power. Power will still be the main,” AEV Chief Finance Officer Manuel R. Lozano told reporters in a press chat in Taguig City last week. 

Next year’s spending plan is significantly lower than the P77-billion capex for 2017.

AEV’s power segment, AboitizPower Corp. is targeting to add around 500 megawatts (MW) of installed capacity by next year.

“Pagbilao should be finishing soon. Therma Visayas in Cebu both units by middle of the year. First one should be March, April. Second one by June. Manolo-Fortich will also be finishing. So there’s gonna be a lot of new capacity for us next year, 2018,” Mr. Lozano said. 

The Pagbilao power plant expansion in Quezon province has a capacity of 400MW, but half of this will be attributable to its foreign partners TeaM Energy Philippines, a partnership between Japanese firms Tokyo Electric and Marubeni Corp.

The 340MW plant by AboitizPower unit Therma Visayas, Inc. in Toledo City, Cebu will also be finished in 2018, with 20% of the capacity to be shared with its partner, Vivant Corp.

“So the 500 (MW) more or less, that’s our equity interest. That probably will bring us to close to 3,500MW… We’re well below the grid limit, probably overall in the country at 18%,” Mr. Lozano said.

The executive of one the country’s largest power producers said they may also allocate funds for the expansion of its cement plant. AEV’s infrastructure arm, Aboitiz InfraCapital, Inc. owns Republic Cement and Building Materials, Inc. To date, Republic Cement’s current capacity stands at seven million tons.

“Our cement (plant), we may begin 2018 or early 2019 to also expand, potentially, so that will also be a big capex as well. But that one is a question of timing,” Mr. Lozano said. 

Meanwhile, AEV is also targeting the completion of its bulk water supply project in Davao City by 2019. Construction of the P10-billion project in partnership with JV Angeles Construction Corp. has been pushed back to the first quarter of 2018 due to various government permits and documentary requirements.

“Water supply in Davao hasn’t been enough for a long time, because in Davao City all of their water comes from the ground, it’s ground water. (It’s) depleting, but more importantly the quality is not good. Because the deeper you are, the more chemicals, contaminants, and then more expensive to pump the water up,” Mr. Lozano said.

This will further have a 1.5-MW hydro power component that will be used exclusively for the operation of the bulk water project.

AEV posted a 6.9% decline in attributable profit for the first nine months of 2017 to P15.9 billion, pulled down by the recognition of foreign exchange losses upon revaluation of dollar-denominated liabilities and pre-termination costs. Revenues for the period were up 27% to P111.48 billion. 

Aside from power and infrastructure, AEV also has core interests in financial services, food manufacturing, real estate, and portfolio investments. 


...Aboitiz moving into construction abroad? expanding

Aboitiz Construction in talks with 2 Chinese firms

THE construction arm of Aboitiz Equity Ventures, Inc. (AEV) is currently in negotiations with two Chinese firms, in an effort to increase its footprint overseas.

Aboitiz Construction, Inc. (ACI) disclosed on Monday that its officials recently visited Chinese firms Shandong Electric Power Construction Corporation III (SEPCO3) and Dongfang Electric Company (DEC), which resulted in offers of partnership from the two.

“At home or abroad, ACI will continue to pursue opportunities that will allow us to advance business and communities through our various projects, as well as put us on track to being the contractor of choice by completing projects on time, on budget, safely, and within specifications,” ACI Chairman Jaime Jose Y. Aboitiz was quoted as saying in a statement.

SEPCO3 provides construction services to energy firms, specifically in designing, building, and operating power plants. These are done through the engineering, procurement, construction method, build-operate-transfer method, and build-operate-own-transfer method.

Outside China, SEPCO3 also operates in India, Nigeria, Jordan, Saudi Arabia, Oman, Indonesia, and Singapore.

On the other hand, DEC works under the Chinese central government, and specializes in the manufacturing industry. The company is also involved in the research and development of new technology, contracting of international engineering projects, the export of complete plans and equipment, and the conduct of international economic and technical cooperation.

“The visit aimed to strengthen the firms’ interest to partner with ACI, specifically for power projects, as well as other infrastructure projects in the Philippines under the Build, Build, Build Program of the government,” the company said.

ACI’s engagement with Chinese firms comes amid the government’s more lax attitude towards China, as the country is expected to play a key role in investing in President Rodrigo R. Duterte’s P8-trillion infrastructure program.

Just recently, the Duterte administration said it has made an offer for the Chinese government to invest in the telecom industry, in order to break the duopoly between telecom giants PLDT, Inc. and Globe Telecom, Inc.

ACI is part of AEV, which has core interests in power, infrastructure, financial services, food manufacturing, real estate, and portfolio investments.

AEV generated an attributable profit of P15.9 billion in the first nine months of 2017, 6.9% lower year on year due to foreign exchange losses, despite a 27% increase in revenues to P111.48 billion.



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