Release Date: March 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Aboitiz Equity Ventures Inc (ABTZY, Financial) reported a significant increase in net income after tax, reaching MXN3.46 billion pesos, approximately four times higher than the previous year.
- EBITDA grew by 78% year-on-year to MXN7.8 billion pesos, driven by improved performance in commodity-based businesses, particularly flour milling operations.
- The company launched a new feed mill facility in China, expanding production capacity and reinforcing leadership in animal nutrition and feed production.
- AboitizLand Inc reported a 14% increase in revenues, driven by recognized sales and construction activity, with residential sales growing by 15% year-over-year.
- Aboitiz InfraCapital Inc saw a 26% year-on-year increase in revenue, driven by strong demand and ongoing expansion efforts, with significant investments in economic estates and airport operations.
Negative Points
- Aboitiz Equity Ventures Inc (ABTZY) experienced a 2% decline in revenue for Abo Foods, primarily due to a strategic shift in the trading division's business model and lower selling prices.
- The meats division faced challenges, with a 15% decline in revenue as the company prioritized live hog sales over carcass and processing.
- AboitizLand Inc's overall net income declined by 25% due to the absence of asset monetization gains realized in the previous year.
- Aboitiz InfraCapital Inc's net income after tax was impacted by increased borrowing costs to fund strategic investments, resulting in a net income of $600 million.
- The water business, particularly Apo Agua, recorded a net loss in its first year of operations due to the gradual ramp-up of volume delivery and transition from capitalizing costs to recognizing depreciation and other operating expenses.
Q & A Highlights
Q: What is your margin outlook for Aboitiz Foods? Do you expect more expansions this year, or have you reached a stable steady state already?
A: Tristan Aboitiz, Chief Operations Officer of Animal Feeds, stated that the company is at a steady state overall. While some areas may see margin declines and others improvements, the focus is on volume growth across livestock feed, flour businesses, and consistent margins in the aqua feed and meat businesses.
Q: Can you elaborate on the strategic shift in the trading and meat segments that caused a drag in overall performance? What is the strategy moving forward and when do you expect the turnaround?
A: Tristan Aboitiz explained that the strategic shift improved the meats business performance. The drag was more significant in the first half of last year. The company prioritized more profitable channels, reducing sales volume but improving margins. They expect to post positive monthly contributions from the meats business in the second half of this year.
Q: As the new President of AboitizLand, could you talk about your key priorities and overall strategic direction for the organization?
A: Rafael Fernandez de Mesa, President & CEO of AboitizLand Inc., aims to strengthen their position in key markets like Central Luzon and South Luzon. They plan to leverage the growth of Aboitiz InfraCapital's economic estates and establish AboitizLand as the primary housing provider for these ecosystems.
Q: Can you provide updates on the newly awarded airports, Laindingan and Bohol?
A: Cosette Canilao, President & CEO of Aboitiz InfraCapital Inc., mentioned that Laindingan Airport's handover is scheduled for April 26, and Bohol Airport's for June. They focus on improving customer experience and expect increased international traffic at Bohol Airport.
Q: Given the impairment in RCBM, what is the current investment value to AEV? Should we expect further impairment recognition this year?
A: Cosette Canilao stated that hopefully, they have reached the bottom of the cycle. The cement business is cyclical, and while there might be additional impairments, they are not expected to be significant.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
