Aboitiz nearly quadruples earnings as pandemic shock dissipates

Aboitiz nearly quadruples earnings as pandemic shock dissipates

MANILA, Philippines — Aboitiz Equity Ventures shook off pandemic blues in the first quarter, raking in profits in power, banking and infrastructure in absence of strict lockdowns that hurt its business last year.

The conglomerate registered a net income of P7.6 billion from January to March this year, nearly four times last year’s P2 billion, a disclosure to the stock exchange stated on Wednesday. Core income rose also nearly that scale to a larger P7.8 billion.

Aboitiz adds to a growing number of businesses that are recording a bounce-back from last year’s shock that started when the government abruptly placed Luzon under lockdown for the first time in March. That resulted in some businesses shutting down, which meant erasing nearly a month’s worth of earnings due to the pandemic.

A year after, the economy is more reopened despite Metro Manila and four nearby areas shifting back to enhanced community quarantine at the last minute of the first quarter. For the Aboitiz Group, investments in digitalization have started to pay off so much so that disruptions from the health crisis are now more manageable, Sabin Aboitiz, president and chief executive, said.

“We are prepared and committed to see our businesses through with the same growth pathway and trajectory,” he said in a statement.

At the forefront of its digital push was UnionBank of the Philippines, whose early and aggressive digital investments paid off with net income up 79% year-on-year to P2.6 billion. In turn, the banking segment contributed 29% of earnings to its parent’s income. 

However, the largest contribution for the first 3 months came from the power business with 58% share. Aboitiz Power Corp.’s core net income swelled nearly 3 times to P6.2 billion due to higher water resources, more thermal plants running as well as electricity spot sales.

Hard infrastructure also delivered. In real estate, AboitizLand Inc. swung back to positive territory with P101 million consolidated net income as sales of residential units survived a pandemic crunch. For bigger outlays, Republic Cement & Building Materials Inc. also posted sterling performance. 

Real estate and infrastructure separately contributed 4% and 8% to the parent’s earnings, respectively, as of March.

Finally, despite the African swine fever risking supplies of its meat, non-listed food subsidiaries like Pilmico Foods Corp. also went saw profits worth P153 million, recovering from P345 million losses same period a year ago. Higher retail prices of protein due to tight supplies helped offset weakened demand.

Aboitiz Equity’s consolidated assets inched up 2% year-on-year to P620.4 billion in the first quarter, only matching the increase in liabilities to P393.4 billion. The company has a standing net debt-to-equity ratio of 1.1x.

The conglomerate’s EBITDA, which are earnings before interest, taxes, depreciation and amortization— another measure of profitability— stood at P18 billion, financial results showed.

Listed Aboitiz Equity shares surged 3.97% at P35.35 apiece at midweek. Those in AboitizPower rose a smaller 2.03% to close at P22.65 each.