MANILA -- Conglomerate Aboitiz Equity Ventures, Inc. (AEV) said Friday its profits declined 4 percent to PHP21.6 billion in 2017 from PHP22.5 billion the previous year, due to the decline in earnings from its banking, food and infrastructure businesses.
AEV reported to the local bourse that it recognized non-recurring losses of PHP2.3 billion primarily due to asset impairment and debt prepayment costs, which were partially reduced by a one-off recognition of lower interest expense from an acquired loan.
“While we faced challenges that tested the resilience of our portfolio, these results still showed the underlying strength of our core operating businesses, prompting our optimism on the long-term fundamentals of our businesses,” said AEV President and Chief Executive Officer Erramon Aboitiz.
Aboitiz Power Corp.’s income rose from PHP15.4 billion to PHP15.7 billion.
The biggest income contribution came from its power business at 69 percent, while its banking and financial services, food, land and infrastructure strategic business units (SBUs) shared 18 percent, 7 percent, 3 percent, and 3 percent, respectively.
Union Bank of the Philippines posted a 2017 net income of PHP8.4 billion, 17 percent lower than PHP10.1 billion the previous year in the absence of one-off trading gains.
The profit of AEV’s non-listed food subsidiaries -- Pilmico Foods Corp., Pilmico Animal Nutrition Corp., and Pilmico International Pte. Ltd. -- declined slightly from PHP1.73 billion to PHP1.70 billion.
The drop in feeds and flour was driven by higher cost of raw materials and operating expenses, while farms’ decline was attributed to higher-than-expected rise in live hogs’ selling prices.
Net income of real estate segment Aboitiz Land, Inc. surged by a whopping 295 percent to PHP744.2 million from PHP188 million due to exceptional business performance of its units and recognized fair valuation gains on investment properties.
From the infrastructure group, Republic Cement and Building Materials, Inc.’s net income contribution to AEV declined 57 percent from PHP1.6 billion in 2016 to PHP671 million in 2017.
AEV said cement demand grew modestly last year but this was offset by lower prices, as well as increased fuel and power costs. (PNA)
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