March 07, 2017

AP posts better-than-expected 2016 full year results

Aboitiz Power Corp (AP) today announced a 14% YoY increase in 2016 net income to P20b. Excluding non-recurring losses of P612m (vs a gain of P762m in 2015) mainly coming from forex losses owing to the revaluation of dollar denominated liabilities, refinancing costs and goodwill impairment, AP’s core net income amounted to P20.6b, 12% higher than the previous year’s P18.4b. On a quarterly basis, core earnings reached P5.4b, up 1% while reported net income declined 9% to P4.9b because of non-recurring losses of P510m compared with a gain of P43m in 2015.

A's power generation business turned in higher core net profits of P4.7b (+6%) and P17.2b (+16%) in 4Q16 and 2016, respectively. The increase was mainly driven by incremental profits from AP’s 300 MW coal-fired power plant in Davao, which started commercial operations in Sept 2015 for Unit 1 and Feb 2016 for Unit 2. Total attributable net energy sold grew by 8% to 13,495GWh in 2016 from 12,550 GWh in 2015.

On the other hand, the power distribution business registered lower net profits, down 35% to P757m in 4Q16 and 4% to P3.7b in 2016. The decline was attributed to prior year adjustments
taken up in 2016. Total attributable electricity sales for the full year increased by 7% to 5,105 GWh while gross margin on a per kWh basis decreased slightly to P1.59 from P1.61 a year ago due to underrecoveries given a shift in the group’s supply mix.