Aboitiz Power Corporation (Aboitiz Power) has reported total earnings of PHP4.3 billion for the year-end 2008, up 4%, compared with the total earnings in the previous year-end. It has also reported a net income of PHP4.7 billion for the year-end 2008, up 38%, compared with the net income of PHP3.4 billion in the previous year-end.
The company had a non-recurring net loss of PHP331 million due to (1) foreign exchange net losses of PHP534 million resulting from the revaluation of dollar-denominated loans and placements of the parent company and some of its subsidiaries; (2) the reversal of a PHP260 million provision made by an associate company due to an arbitration settlement, and (3) a PHP57-million project cost write off.
For Aboitiz Power’s generation business, total power sold in 2008 recorded a 70% increase from 1,018 GwH to 1,728 GwH. The increase was brought on by the full-year contributions of Aboitiz Power’s 2007 acquisitions. The takeover and operation of the 100-MW Binga hydro power plant in July 2008 likewise resulted to the increase in the group’s generation output. Higher rainfall during the year also resulted to higher capacity factors for most of the hydro plants.
As of yearend 2008, Aboitiz Power’s power generation group had an attributable capacity of 578MW, an 18% increase from 2007. The increase was due to the turnover of the 175-MW Ambuklao-Binga hydro plants in July 2008.
The power generation business ended the year with a net income contribution of PHP2.8 billion, recording a 6% growth from PHP2.6 billion in 2007. When adjusted for non-recurring items, the business recorded a 77% expansion, from PHP1.8 billion in 2007 to PHP3.2 billion in 2008.
For the distribution business, the group’s kilowatt-hour electricity sales for the period grew by 13%, from 2,790 GwH to 3,142 GwH. Aside from the incremental volume sales from the 2007 acquisitions, the expansion in Subic EnerZone’s industrial segment accounted for the strong growth of the distribution group. Power demand increased mainly due to the Hanjin shipyard operations. On an organic basis, the group recorded a 7% growth.
Power consumption in 2008 of both residential and non-residential customers continued their strong showing, growing by 3% and 17%, respectively. This was on the back of an improved customer base with residential and non-residential accounts growing by 3% and 5%, respectively. The full-year sales volume contribution of the 2007 acquisitions led to the strong growth of the non-residential segment.
Despite the robust volume growth recorded, the distribution group’s income contribution for the year recorded a slight decline of 3% to PHP1.5 billion. The high inflationary environment in 2008 led to an increase in the group’s fixed operating expenses that outpaced its gross profit growth. This resulted to a decline in operating margin.
As of December 31, 2008, Aboitiz Power’s total consolidated assets amounted to PHP47.3 billion, up by 31% from year-end 2007 levels. The company remains in a net cash position with consolidated Cash and Cash Equivalents at PHP14.9 billion and total consolidated interest-bearing loans at PHP11.4 billion. Equity Attributable to Equity Holders of the Parent increased by 13% to PHP30.2 billion. Current ratio as of period end was at 2.2x (versus year-end 2007’s 2.5x), while net debt-to-equity ratio was at –0.13x (versus year-end 2007’s –0.29x).
On December 15, 2008, Aboitiz Power signed a Notes Facility Agreement with BDO Capital & Investment Corporation, BPI Capital Corporation, First Metro Investment Corporation, ING Bank N.V., Manila Branch as joint lead managers for the issuance of 5-year and 7-year peso-denominated corporate fixed rate notes. On December 18, 2008, Aboitiz Power availed a total of PHP3.89 billion. Issuance was done via private placement to not more than 19 institutional investors. The proceeds will be used to finance planned acquisitions of Aboitiz Power as well as for other general corporate purposes.
On January 20, 2009, Aboitiz Power filed with the Securities and Exchange Commission a preliminary registration statement for the fixed rate corporate retail bonds with an aggregate principal amount of up to PHP1.5 billion and an additional amount of up to PHP1.5 billion to cover any over-subscription. Proceeds from this issuance will be used to partially finance the 40% downpayment of Aboitiz Power’s acquisition of the Tiwi-Makban geothermal facilities.
Both debt issues received a “PRS Aaa”, the highest possible rating assigned by the Philippine Rating Services Corporation. Obligations rated “PRS Aaa” are of the highest quality with minimal credit risk, an indication of the extremely strong capacity of the obligor to meet its financial commitment on the obligation.
On February 11, 2009, Aboitiz Power declared a regular cash dividend of PHP0.20 per share or a total payout of PHP1.47 billion to all stockholders of record as of February 26, 2009, payable on March 23, 2009. The company has a dividend policy of distributing at least one-third of its consolidated net income from the preceding fiscal year as cash dividends.