Aboitiz Power Corporation (PSE: AP) recorded consolidated net income of PhP5.0 billion for the second quarter of 2019, 2% lower than the PhP5.1 billion recorded for the same period last year. Non-recurring gains amounting to PhP560 million were recognized during the period, compared to the PhP196 million in non-recurring losses recorded during the previous year. Without these one-off gains, core net income for the second quarter of 2019 was PhP4.5 billion, 16% lower year-on-year, which was largely due to interest expense from the Company’s bond issuance in October 2018 and takeup of interest and depreciation expenses from Hedcor Bukidnon, Inc. and Therma Visayas, Inc.
On a year-to-date (YTD) basis, AboitizPower’s net income for the first half of 2019 was PhP8.6 billion, 5% lower than the PhP9.1 billion recorded last year. The Company recognized non-recurring gains of PhP121 million, versus last year’s losses of PhP1.4 billion, coming from net foreign exchange gains on the revaluation of dollar denominated liabilities. Without these one-off gains, the Company’s core net income was PhP8.5 billion, 19% lower than the PhP10.5 billion recorded in the same period last year, which was largely the result of the higher volume and cost of purchased power during the first half of 2019. Spot market prices were exceptionally high during the first half of 2019, and the Company purchased replacement power due to outages and contracting ahead in preparation for incoming capacity.
Results of Operations
Generation and Retail Electricity Supply
AboitizPower’s generation and retail supply business recorded consolidated earnings before interest, tax, depreciation and amortization (EBITDA) of PhP17.8 billion in the first half of 2019, 12% lower than the PhP20.2 billion recorded during the same period last year. This was due to the aforementioned higher volume and cost of purchased power. Spot market prices were high during the first half of 2019, and the Company purchased replacement power due to outages and contracting ahead in preparation for Therma Visayas, Inc.’s incoming capacity.
Capacity sold for the first half of 2019 decreased by 6%, from 3,213 megawatts (MW) in 2018 to 3,035 MW in 2019, due to Therma Mobile, Inc.’s bunker C-fired diesel power plants being put on preservation mode in the first quarter of 2019.
For the first half of 2019, AboitizPower’s distribution business recorded consolidated EBITDA of PhP3.7 billion, 5% lower than the PhP3.9 billion recorded during the corresponding period in 2018, which was primarily due to lost margins from the decommissioning of the Bajada power plant. The Company saw energy sales increase to 2,842 gigawatt-hours (GWh), which was 5% higher than the 2,719 GWh recorded in the first half of 2018. This was primarily driven by the increase in new customers across all segments.
As of June 30, 2019, AboitizPower’s total consolidated assets stood at PhP404.5 billion, 4% higher than the year-end 2018 level of PhP389.7 billion. Total cash and cash equivalents as of the end of the first half of 2019 was PhP31.8 billion, while total consolidated interest bearing liabilities was PhP235.7 billion. Equity attributable to holders of the parent was PhP118.0 billion. As of June 30, 2019, the Company’s current ratio was at 1.3x, versus year-end 2018’s 1.9x, while its net-debt-to-equity ratio was at 1.6x, versus year-end 2018’s 1.2x.