Aboitiz Equity Ventures Sees 10% Profit Increase in First Half of 2024

Aboitiz Equity Ventures Inc. (AEV) reported a consolidated net income of ₱11.5 billion for the first half of 2024, marking an almost 10 percent increase from the ₱10.5 billion recorded in the same period last year. This growth was primarily driven by robust performances in the company's power and food and beverage businesses.

Key Financial Highlights

Excluding a non-recurring net gain of ₱83 million, AEV’s core net income reached ₱11.4 billion, which is nearly three percent higher than the ₱11.1 billion recorded a year ago. The second quarter alone saw a consolidated net income of ₱6.6 billion, a slight increase of 2 percent from ₱6.5 billion reported in the same period last year.

Sector Contributions

The power sector remained the largest contributor to AEV’s earnings, accounting for 65 percent of the total net income. Aboitiz Power Corp. contributed ₱9.1 billion, slightly down from ₱9.3 billion in the same period last year. The decline was attributed to depreciation and interest expenses related to GNPower Dinginin Ltd. Co.’s (GNPD) Units 1 and 2. Despite these challenges, Aboitiz Power reported an 8 percent increase in earnings before interest, tax, depreciation, and amortization (EBITDA), reaching ₱36.3 billion, driven by higher generation margins and the energization of new solar power plants.

Union Bank of the Philippines Performance

Union Bank of the Philippines (UnionBank) saw a 23 percent decline in profit, contributing ₱2.5 billion to AEV’s earnings. On a standalone basis, UnionBank’s net income for the first half of 2024 was ₱5.1 billion, down 17 percent from the previous year. This decline occurred despite an 8.3 percent rise in revenues to ₱37.3 billion.

Real Estate and Infrastructure Segments

Aboitiz Land Inc. reported a 14 percent increase in net income to ₱445 million, driven by higher revenues from new phases in residential projects and increased sales. However, Aboitiz InfraCapital posted a loss of ₱312 million, reversing a ₱334 million profit from the previous year due to higher interest expenses from debt for expansion projects.

Food and Beverage Surge

The food and beverage segment, including Pilmico Foods Corp., Pilmico Animal Nutrition Corp., Pilmico International Pte. Ltd., and Coca-Cola Beverages Philippines Inc. (CCBPI), contributed ₱2.8 billion in income. This is a significant increase from the ₱181 million reported in the same period last year, primarily driven by the flour and agribusiness divisions and new contributions from CCBPI, which was acquired in February 2024.

Challenges in Cement Business

AEV’s share in Republic Cement & Building Materials Inc.'s loss was ₱407 million, slightly lower than the ₱452 million loss recorded a year earlier. The cement business faced declining sales volumes and prices amid weak demand, despite improved margins due to lower costs.

Looking Forward

AEV’s diversified portfolio continues to drive its overall growth, with strategic investments in power, food, banking, real estate, and infrastructure. As the company navigates the evolving market landscape, it remains committed to enhancing its financial performance and delivering value to its stakeholders.