AboitizPower closed 2011 with a consolidated net income of P21.6 billion, dominated by its power generation business which account to more than 90 percent of the group’s income.
The figures were down by 14 percent year-on-year and translated to earnings per share of P2.94.
On a full-year basis, the generation business recorded an income share of P20.4 billion for the year, down by 16 percent year-on-year. Netting out one-off items, the company’s generation business shored in P19.8 billion 16 percent lower than the previous year due to the lower average selling price and lower recorded net generation.
“Aside from organic growth coming from increased contracts, we will continue to expand our generating capacity through brownfield and greenfield projects. We expect to add approximately 700 MW of additional attributable capacity between 2012 – 2015,” said AboitizPower President & CEO Erramon Aboitiz.
In Mindanao, AboitizPower has holdings in Davao Light and Power Co., Cotabato Light, hydro power generator Hedcor, Therma Marine Inc. and the soon-to-be constructed coal power plant Therma South Inc. It also has holdings in Steag State Power, among others.
The power distribution group registered a 25% year-on-year earnings expansion, from P1.9 billion to P2.4 billion. This was on the back of increased electricity sales and improved average gross margin. For the year ending December 31, 2011, total attributable electricity sales increased by 3 percent year-on-year, from 3,606 GWh to 3,727 GWh. The industrial segment again led the pack, recording a 6 percent year on year growth, while residential and commercial accounts posted marginal declines during the year.
The group’s average gross margin for 2011 improved by 15 percent to P1.44/kWh, as a result of the implementation of the approved distribution tariffs (under the Performance Based Regulation) of some of AboitizPower’s distribution utilities and the reduction in operating expenses of Davao Light and Power Company. The Davao utility recorded a significant decline in operating expenses in 2011 as the operation of its back-up power plant was not required during the year.
In spite of slower kwhr sales growth, our Distribution Group experienced favorable profit growth coming from improved margin and controlled operating costs. We are confident that electricity consumption will kick up in 2012 with the expected growth in the economy,” Aboitiz said.
The decline in consolidated revenue was caused by the revaluation of consolidated dollar-denominated loans and placements resulted to a non-recurring loss of P160 million. In addition, the company booked a P663-million one-off gain during the year because of the following: 1) a wholly owned subsidiary booked revenue adjustments in the first quarter of 2011 resulting from a favorable ruling by the industry regulator regarding its tariff structure for its ancillary services contract; 2) an associate company recovered costs relating to its fuel importation in the second and fourth quarters; 3) a subsidiary reversed a 2010 accrued expense relating to its Independent Power Producer Administrator (IPPA) contract in the third quarter of 2011; and 4), the company incurred fees relating to the prepayment of an outstanding loan in the fourth quarter. Adjusting for these one-offs, AboitizPower’s core net income for 2011 amounted to P21.1 billion, down by 14 percent year-on-year.
AboitizPower also recorded a consolidated net income of P5.4 billion for the quarter ending December 31, 2011, down by 17 percent versus the same period in 2010. Movements in the peso-dollar exchange rate resulted to a P124-million non-recurring loss due to the revaluation of consolidated dollar-denominated loans and placements. A P93-mn one-off loss was also incurred when AboitizPower prepaid one of its outstanding fixed rate notes in December 2011. This was partially offset by a non-recurring gain of P35 million booked by an associate company, as it received cost reimbursements from the National Power Corporation (NPC) relating to its fuel importation. All these brought AboitizPower’s core net income for the fourth quarter of 2011 to P5.6 billion, lower by 14 percent year-on-year.
As of December 31, 2011, AboitizPower’s total consolidated assets amounted to P154.2 billion, 15 percent higher than the yearend 2010 level of P134.6 billion.
“The strength of our power business lies in our diversified, complementary and competitive portfolio of generating assets. We have also been able to mitigate earnings volatility through our contracting strategy. We are confident that this, couple with our experienced management team, provides us with the ingredients necessary to thrive in a more challenging environment with the onset of more competition, open access, and the full implementation of WESM nationwide,” said Aboitiz.
