Aboitiz Equity first-half income halved as COVID-19 weighs on business

Aboitiz Equity Ventures Inc.'s bottom line was slashed by half in the first six months of the year, reflecting the impact of the COVID-19 pandemic on its business operations.

In an emailed statement, the conglomerate reported a 55% drop in its net income to P4 billion from P9 billion in the same period last year.

The company reported P20-million worth of non-recurring losses, representing foreign exchange losses from the revaluation of dollar-denominated assets. This is a reversal of the P78-million non-recurring gains the same semester in 2019.

"The current COVID-19 crisis continues to disrupt and impact our organization in different ways," said Aboitiz Group president and chief executive officer Sabin Aboitiz.

"Throughout this, we have given significant attention to our ability to adapt to changes and to prepare for uncertainties," he added.

The Philippine economy was in a standstill from March to May, when Metro Manila and other "high-risk" areas were placed under an enhanced community quarantine (ECQ) from March 17 to May 15, followed by a modified enhanced community quarantine (MECQ) until May 31.
https://www.gmanetwork.com/news/news/nation/729875/duterte-orders-lockdown-of-entire-luzon-due-to-covid-19-threat/story/

Looser restrictions have since been in place under the general community quarantine (GCQ) which was implemented starting June 1 and extended to last until July 31.
https://www.gmanetwork.com/news/news/nation/736330/guidelines-for-areas-under-gcq-starting-may-1-2020/story/
https://www.gmanetwork.com/news/news/nation/747083/philippine-areas-under-mecq-gcq-mgcq-until-july-31/story/

"For the rest of the year, our goal is unchanged: to remain resilient and for our business units to be in the best possible position when we emerge from this crisis, in order to support the country’s economic recovery," said Aboitiz.

The group's largest business unit Aboitiz Power Corp. saw a 57% decrease in its net income contribution to P2.9 billion from P6.7 billion.

The group attributed this to reduced demand due to the enforcement of the community quarantines, as well as forced outages during the period.

Its banking unit Union Bank of the Philippines reported a 3% drop in income contribution to P2.3 billion, while non-listed food subsidiaries contributed P795 million, 44% higher than P552 million in 2019.

AEV's non-listed real estate businesses reported a consolidated net loss of P39 million, a reversal of the P60-million income in 2019.

Republic Cement & Building Materials Inc. likewise recorded a net loss of P10 million in the first half, which compares with the P249-million income in 2019.

"This was due to the contraction in the demand for cement as construction activities dramatically slowed down, particularly during the enforcement of COVID-related community quarantines," it said. —KBK, GMA News