Aboitiz Equity Ventures Inc. Sees 4% Rise in 2024 Nine-Month Net Income, Driven by Power and Banking Gains
Aboitiz Equity Ventures Inc. (Stock: AEV), a diversified conglomerate with interests in sectors from power generation to banking, has announced a modest 4% year-over-year growth in consolidated net income for the first nine months of 2024, totaling ₱18.8 billion. AEV's results underscore the strength of its balanced portfolio, with particularly robust growth in its Power and Financial Services divisions.
AEV’s consolidated net income grew to ₱18.8 billion from ₱18.0 billion year-over-year, even after accounting for a one-time foreign exchange loss of ₱20 million. Stripping out such non-recurring items, AEV’s core income was up by 9% to ₱18.8 billion—a sign that its operational performance was stronger than the headline figures might suggest.
In the third quarter alone, AEV’s net income was ₱7.3 billion, a slight 4% dip from the same period in 2023, largely attributed to currency fluctuations. However, core earnings for Q3 increased significantly by 20%, reaching ₱7.4 billion, a testament to the underlying strength of AEV’s main business segments.
Diverse Sector Performance- Power Sector Leads with 64% Contribution
Aboitiz Power Corporation (Stock: AP), AEV's subsidiary focused on energy, remains its largest income contributor, accounting for 64% of total net income. AboitizPower’s net income contribution to AEV rose to ₱14.5 billion, a 4% increase from last year, driven by both the expansion of solar capacity and higher energy sales. The company’s new 159 MW Laoag and 94 MW Cayanga solar plants, along with increased demand due to El Niño conditions, supported this growth.
For the first nine months of 2024, AboitizPower recorded energy sales of 26,910 GWh, 2% higher year-on-year. Additionally, energy sales in the Distribution Utility business rose by 8%, benefiting from residential, commercial, and industrial demand increases. - Union Bank’s Steady Growth
Union Bank of the Philippines (Stock: UBP), AEV’s banking arm, contributed ₱4.2 billion to the net income for the nine-month period, reflecting a 4% increase from the prior year. UnionBank saw a 9% rise in total revenues, bolstered by a 14% increase in net interest income due to strong loan demand in its consumer segment, which makes up 60% of its portfolio. Following its acquisition of Citi’s consumer business, UnionBank also improved efficiency, reducing operating expenses and significantly enhancing its cost-to-income ratio to 57.2%, down from 63.4% in 2023. - Food and Beverage: Noteworthy Surge
AEV’s Food and Beverage segment, which includes Pilmico Foods, Pilmico Animal Nutrition, and its recent 40% stake in Coca-Cola Beverages Philippines Inc., experienced an impressive income increase, rising from ₱499 million in 2023 to ₱4.2 billion in 2024. This sharp rise was mainly due to stabilizing commodity prices and the strategic management of raw materials and pricing. - Real Estate Decline
AboitizLand, AEV’s real estate division, recorded a net income of ₱521 million, down by 27% year-over-year due to higher operating expenses and reduced asset monetization compared to 2023. - Challenges in Infrastructure
In contrast, Aboitiz InfraCapital posted a net loss of ₱148 million, reversing from a ₱1.4 billion gain in 2023. The subsidiary’s involvement in Republic Cement also faced headwinds, with AEV’s share of Republic’s loss rising to ₱726 million, driven by weakening cement demand.
Financial Position and Outlook
As of September 30, 2024, AEV’s total assets increased slightly to ₱844.9 billion, and cash reserves stood at ₱79.0 billion, a 30% decrease from the prior year. This drop in cash holdings, combined with prudent debt management, led to a reduction in AEV’s total liabilities to ₱453 billion, keeping the company’s financial health stable with a strong current ratio of 1.9x and a conservative debt-to-equity ratio of 0.8x.
AEV remains optimistic about its future growth. The company expects that moderating inflation and recent rate cuts will provide further economic support across its diversified business sectors. The group’s strategy focuses on leveraging these improving economic conditions to enhance value creation, with CEO Sabin Aboitiz highlighting the company’s capacity to benefit from both its scale and diversified assets.
AEV’s strategic emphasis on sustainable growth, particularly through investments in renewable energy, digital banking, and consumer-driven food and beverage products, positions the company for steady performance even amid fluctuating market conditions.