Doing Well by Doing Good
Aboiz Equity Ventures, Inc. 2014 Annual Report
Table T able of Contents
Doing Well by Doing Good Wecandowellbydoinggood,alwaysmakingtherightlong-termdecisions thatbalancetheinterestsofpeople,planetandprot.
Doing Well by Doing Good
1
Aboitiz Equity Ventures, Inc.
The Aboiz Way
2
Corporate Structure
85
Our Businesses
3
Board of Directors
86
Aboiz BeerWor BeerWorld ld
4
Corporate Ocers
88
Milestones
6
Business Unit Heads
91
ManagementDirectory
92
Our Businesses At a Glance
10
Financial Highlights
Aboitiz Power Corporation 12
Locaon of Operaons
93
Aboiz Power Corporaon (AboizPower)
14
Board of Directors
94
Corporate Ocers
In doing our business, we look beyond protability and constantly explore beer ways ways to integrate social development and environmental stewardship into our operaons. As a socially responsible organizaon, organizaon, we focus on delivering value to all our stakeholders�our stakeholders�our team members, customers, shareholders, partners, and communies�by responding appropriately to their evolving needs to promote inclusive growth.
Aboiz Equity Ventures, Inc. (AEV)
Messages
This is the essence of the Aboiz sustainability mindset, which all of us in the Group take to heart. We believe believe that by doing good, we will do well and achieve long-lasng sustainability.
96
Business Unit Heads
100
ManagementDirectory
101
AEV and AboizPower Chairmen
16
AEV and AboizPower CEO
20
AEV Chief Financial Ocer
25
Aboitiz Foundation, Inc.
AboizPower Chief Financial Ocer
29
Board of Trustees
102
Board of Advisers
104
While growing our businesses, we make sure we do our best to minimize any environmental impact that may result from our decisions and acons. We manage our operaons well and ulize resources prudently to achieve nancial growth and protability. protability. All these we do, driven by our resolve to make Aboiz a truly s ustainable enterprise that we can entrust to future generaons. We believe that doing well by doing good enables us to secure a BeerWorld for everyone today and in the future.
Results of Operations Business Review
34
WeatherPhilippines Foundation, Inc.
Feature: Infrastructur Infrastructure/Biofuel e/Biofuel
57
Board of Trustees
105
Aboiz Foundaon, Inc.
58
Board of Advisers
106
WeatherPhilippiness Foundaon, Inc. WeatherPhilippine
64
Sustainability
67
Audited Consolidated Financial Statements
Corporate Governance
74
Aboiz Equity Ventures, Inc.
107
Talent Management
79
Aboiz Power Corporaon
125
Risk Management
83
t r o p e R l a u n n A
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The Aboitiz Way
Our Businesses
For over a hundred years of doing business, we in the Aboiz Group have nurtured and strengthened our core values and beliefs that guide us to be the best at what we do, and embolden us to uphold our mission of creang long-term value for all our stakeholders. We now refer to this comprehensive system of values and beliefs as The Aboiz Way, Way, the disnctly unique way we do t hings.
•
We keep keep alive our passion passion for beer ways. ways.
•
Driven is what what we are…driven to lead, driven driven to excel, excel, and driven to serve.
•
We are guided by our our me-honored values of integrity, teamwork, innovaon, and responsibility responsibility..
• •
We value our fellow team members and celebrate our successes. Our leaders lead by example, example, mentor and foster foster teamwork, speak what’s on their mind, and deliver results for sustainable growth.
. c n I , s e r u t n e V y t i u q E z i t i o b A
2
Integrity
Teamwork
Innovaon
Responsibility
Power
Land
AboizPower’s Generaon Group harnesses power from a right-mix porolio of renewable (hydro and geothermal) and non-renewable (coal and oil) sources through its 42 generaon facilies across the Philippines. The Group ensures that its generated energy is available and reliable, with facilies operang eciently at the lowest possible cost, and with the least adverse eect on the environment and its host communies.
AboizLand is engaged in the design and development of disnct communies for residenal, industrial, and commercial use. Aer over two decades in operaon, AboizLand is today one of the country’s most trusted companies in real estate development.
AboizPower’s Distribuon Group is composed of eight companies, including the second and third largest private ulies in the country. The Group connues to implement innovave and ecient ways to serve the growing needs of over 840,000 customers.
corporatefoundaon of the Aboiz Group. Established in 1988, it connues to pursue its mission to help people help themselves, implemenng corporate social responsibility intervenons especially in communies where Aboiz companies operate. The Foundaon focuses its eorts on educaon, enterprise development, and environment but also carries out projects on health and well-being, as well as disaster preparedness and response.
Banking UnionBank is one of the country’s largest commercial banks, oering a wide range of quality nancial products and services to retail customers, middle market and corporate clients, and major government instuons. The Bank disnguishes itself through superior technology, a unique branch sales and service culture, and centralized backroom operaons.
Food Pilmico is one of the country’s largest manufacturers of our and wheat by-products. It is also a strong player in the swine producon and animal feeds businesses. With its dedicated commitment to quality products and processes, the company ensures its market compeveness through increased customer sasfacon.
Corporate Social Responsibility (CSR) The Aboiz Foundaon is the
WeatherPhilippines provides the country with a premier weather sensing and forecasng system made possible by technology, technology, inclusive partnerships, and communicaon. Founded in 2012 by the Aboiz Foundaon, UnionBank, and MeteoGroup, it delivers free, more localized, and accurate weather i nformaon accessed through weather.com.ph. weather.com.ph. WeatherPhilippines complements government’s naonwide eorts on disaster risk reducon, and aims to help build a #WeatherWiser naon.
t r o p e R l a u n n A
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3
The Aboitiz Way
Our Businesses
For over a hundred years of doing business, we in the Aboiz Group have nurtured and strengthened our core values and beliefs that guide us to be the best at what we do, and embolden us to uphold our mission of creang long-term value for all our stakeholders. We now refer to this comprehensive system of values and beliefs as The Aboiz Way, Way, the disnctly unique way we do t hings.
• •
We keep keep alive our passion passion for beer ways. ways. Driven is what what we are…driven to lead, driven driven to excel, excel, and driven to serve.
•
We are guided by our our me-honored values of integrity, teamwork, innovaon, and responsibility responsibility..
•
We value our fellow team members and celebrate our successes.
•
Our leaders lead by example, example, mentor and foster foster teamwork, speak what’s on their mind, and deliver results for sustainable growth.
. c n I , s e r u t n e V y t i u q E z i t i o b A
Integrity
Teamwork
Innovaon
Responsibility
Power
Land
AboizPower’s Generaon Group harnesses power from a right-mix porolio of renewable (hydro and geothermal) and non-renewable (coal and oil) sources through its 42 generaon facilies across the Philippines. The Group ensures that its generated energy is available and reliable, with facilies operang eciently at the lowest possible cost, and with the least adverse eect on the environment and its host communies.
AboizLand is engaged in the design and development of disnct communies for residenal, industrial, and commercial use. Aer over two decades in operaon, AboizLand is today one of the country’s most trusted companies in real estate development.
AboizPower’s Distribuon Group is composed of eight companies, including the second and third largest private ulies in the country. The Group connues to implement innovave and ecient ways to serve the growing needs of over 840,000 customers.
Banking UnionBank is one of the country’s largest commercial banks, oering a wide range of quality nancial products and services to retail customers, middle market and corporate clients, and major government instuons. The Bank disnguishes itself through superior technology, a unique branch sales and service culture, and centralized backroom operaons.
Food Pilmico is one of the country’s largest manufacturers of our and wheat by-products. It is also a strong player in the swine producon and animal feeds businesses. With its dedicated commitment to quality products and processes, the company ensures its market compeveness through increased customer sasfacon.
Corporate Social Responsibility (CSR) The Aboiz Foundaon is the corporatefoundaon of the Aboiz Group. Established in 1988, it connues to pursue its mission to help people help themselves, implemenng corporate social responsibility intervenons especially in communies where Aboiz companies operate. The Foundaon focuses its eorts on educaon, enterprise development, and environment but also carries out projects on health and well-being, as well as disaster preparedness and response.
WeatherPhilippines provides the country with a premier weather sensing and forecasng system made possible by technology, technology, inclusive partnerships, and communicaon. Founded in 2012 by the Aboiz Foundaon, UnionBank, and MeteoGroup, it delivers free, more localized, and accurate weather i nformaon accessed through weather.com.ph. weather.com.ph. WeatherPhilippines complements government’s naonwide eorts on disaster risk reducon, and aims to help build a #WeatherWiser naon.
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3
Aboitiz BetterWorld
2014 Performance Performance Highlights
Planet Goal: Minimize our environmental impact
As we take signicant steps towards our sustainability agenda, here are key gures highlighng the Group’s performance in support of our triple boom line.
3.4
People Goal: Partner with our stakeholders to create shared value
893 MW
million trees
Renewable energy (RE) aributable net sellable capacity
No. of trees planted as of 2014
28,518 TM
750 AWS
Team Team members (TM) employed
Automated Weather Staons (AWS) deployed as of 2014
35,133 hours
860
No. of volunteered hours
personnel
P610 million
No. of trained DRRMOs as of 2014
7 initiatives 845,004 t CO2
Waste management iniaves
Greenhouse Gas (GHG) emission
Proft Goal: Grow protably
CSR fund allocaon
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4
742 CSR projects
P18.4 billion Net Income Aer Tax
20% Return on Equity
No. of CSR projects
114,449 beneciaries No. of direct beneciaries
46% (5 years) Total Return to Shareholder per year compounded annually
P38.4 billion EBITDA
t r o p e R l a u n n A
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Aboitiz BetterWorld
2014 Performance Performance Highlights
Planet Goal: Minimize our environmental impact
As we take signicant steps towards our sustainability agenda, here are key gures highlighng the Group’s performance in support of our triple boom line.
3.4
People Goal: Partner with our stakeholders to create shared value
893 MW
million trees
Renewable energy (RE) aributable net sellable capacity
No. of trees planted as of 2014
28,518 TM
750 AWS
Team Team members (TM) employed
7 initiatives
Automated Weather Staons (AWS) deployed as of 2014
35,133 hours
845,004 t CO2 Greenhouse Gas (GHG) emission
860
No. of volunteered hours
personnel
P610 million
Waste management iniaves
Proft
No. of trained DRRMOs as of 2014
Goal: Grow protably
CSR fund allocaon
P18.4 billion
742 CSR projects
. c n I , s e r u t n e V y t i u q E z i t i o b A
20%
Net Income Aer Tax
Return on Equity
No. of CSR projects
114,449 beneciaries
46% (5 years)
No. of direct beneciaries
P38.4 billion EBITDA
t r o p e R l a u n n A
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Total Return to Shareholder per year compounded annually
4
5
Milestones 2003 • The AEV-Davao AEV-Davao Light consorum with Mirant—now known as Subic EnerZone Corporaon— wins the power distribuon management and operaon contract for the Subic Bay Freeport Zone. • Fil-Am Foods becomes wholly owned by AEV, and buys out its partners Tyson Foods and PM Animal Nutrion.
2004 • Hedcor wins bid for the Talomo hydropower hydropower facility in Davao, the rst Napocor asset to be privazed. • ATS introduces the New GeneraonSuperFerries.
1994
• AEV goes public, the rst majority-owned majority-owned Aboiz company to do so.
1995 . c n I , s e r u t n e V y t i u q E z i t i o b A
6
• AEV consolidates its shipping businesses with Cebu-based Carlos A. Gothong Lines and William Lines to form WG&A.
1996 • AEV forms Luzon Hydro to build the 70-MW Bakun hydropower plant in Benguet, the rst buildoperate-transfer project of Napocor.
1997
• Pilmico partners with Tyson Foods and PM Nutrion to form feed and swine company Fil-Am Foods.
1998
• AEV implements a new focused strategy and forms AboizPower as the holding company of the Group’s Group’s power investments. This is to reinforce its focus on the energy sector as the driving force behind the Group’s future growth. • Pilmico, through Fil-Am Foods, opens a feed mill plant in Capas, Tarlac with a capacity of 640 metric tons per day.
• ATS launches new brand 2GO for all its freight businesses.
• The 1st Aboiz Future Leaders Business Summit is held.
2005
2007
• The Aboiz Group launches its refreshed brand identy and unveils its new corporate corporate logo. • VECO, Davao Light, and Cotabato Light sign the largest bulk power supply contract between Napocor and a private distribuon ulity.
• ATS celebrates its 100th anniversary. • AboizPower goes public. • SNAP wins bids for the 75-MW Ambuklao and 100-MW Binga hydro plants. • AboizPower wins bid for a 34% stake in STEAG State Power, Inc., which owns and operates the 232-MW coal-red power plant in Misamis Oriental. • AboizPower acquires half of East Asia Ulies Corporaon and purchases from the laer a 60% stake in Cebu Private Power Corporaon.
2006 • UnionBank acquires the Internaonal Exchange Bank. • AboizPower partners with Norway’s SN Power to form SN Aboiz Power (SNAP). • SNAP-Magat wins bid for the 360MW Magat hydropower plant.
1999
• UnionBank pioneers Internet and wireless access protocol banking in the country. • Fil-Am Foods begins commercial swine operaons.
2000
• AEV buys into San Fernando Electric Light and Power Company of Pampanga, its rst power distribuon investment in Luzon. • The Bakun hydro plant begins operaons.
2002 • AEV fully acquires WG&A, renaming it Aboiz Transport System (ATS).
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Milestones 2003 • The AEV-Davao AEV-Davao Light consorum with Mirant—now known as Subic EnerZone Corporaon— wins the power distribuon management and operaon contract for the Subic Bay Freeport Zone. • Fil-Am Foods becomes wholly owned by AEV, and buys out its partners Tyson Foods and PM Animal Nutrion.
2004 • Hedcor wins bid for the Talomo hydropower hydropower facility in Davao, the rst Napocor asset to be privazed. • ATS introduces the New GeneraonSuperFerries.
1994
• AEV goes public, the rst majority-owned majority-owned Aboiz company to do so.
1995 . c n I , s e r u t n e V y t i u q E z i t i o b A
• AEV consolidates its shipping businesses with Cebu-based Carlos A. Gothong Lines and William Lines to form WG&A.
1996 • AEV forms Luzon Hydro to build the 70-MW Bakun hydropower plant in Benguet, the rst buildoperate-transfer project of Napocor.
1997
• Pilmico partners with Tyson Foods and PM Nutrion to form feed and swine company Fil-Am Foods.
1998
• AEV implements a new focused strategy and forms AboizPower as the holding company of the Group’s Group’s power investments. This is to reinforce its focus on the energy sector as the driving force behind the Group’s future growth. • Pilmico, through Fil-Am Foods, opens a feed mill plant in Capas, Tarlac with a capacity of 640 metric tons per day.
• ATS launches new brand 2GO for all its freight businesses.
• The 1st Aboiz Future Leaders Business Summit is held.
2005
2007
• The Aboiz Group launches its refreshed brand identy and unveils its new corporate corporate logo. • VECO, Davao Light, and Cotabato Light sign the largest bulk power supply contract between Napocor and a private distribuon ulity.
• ATS celebrates its 100th anniversary. • AboizPower goes public. • SNAP wins bids for the 75-MW Ambuklao and 100-MW Binga hydro plants. • AboizPower wins bid for a 34% stake in STEAG State Power, Inc., which owns and operates the 232-MW coal-red power plant in Misamis Oriental. • AboizPower acquires half of East Asia Ulies Corporaon and purchases from the laer a 60% stake in Cebu Private Power Corporaon.
2006 • UnionBank acquires the Internaonal Exchange Bank. • AboizPower partners with Norway’s SN Power to form SN Aboiz Power (SNAP). • SNAP-Magat wins bid for the 360MW Magat hydropower plant.
1999
• UnionBank pioneers Internet and wireless access protocol banking in the country. • Fil-Am Foods begins commercial swine operaons.
2000
• AEV buys into San Fernando Electric Light and Power Company of Pampanga, its rst power distribuon investment in Luzon. • The Bakun hydro plant begins operaons.
t r o p e R l a u n n A
2002
4 1 0 2
• AEV fully acquires WG&A, renaming it Aboiz Transport System (ATS).
6
7
Milestones • UnionBank raises P5.1 billion in new capital aer a 90-million share oer.
2008 • The Aboiz Group Foundaon celebrates its 20th anniversary and changes its name to Aboiz Foundaon. It is now one of the largest CSR foundaons in the country. • AP Renewables, Inc. (APRI) acquires the 289-MW Tiwi geothermal plant in Albay and the 458-MW MakBan geothermal plant in Laguna and Batangas. • Pilmico inaugurates a new feed mill facility in Kiwalan Cove, Iligan City. • UnionBank launches its new brand posioning, Smart Banking, as well as a new corporate logo.
2009 • Erramon I. Aboiz is elected AEV President and CEO, replacing Jon
. c n I , s e r u t n e V y t i u q E z i t i o b A
8
Ramon Aboiz, who had led the company since 1993. • AboizPower launches its refreshed brand identy, including a new logo and a brand promise. • AboizPower secures an Independent Power Producer Administrator contract for the 764-MW Pagbilao plant in Quezon. • AboizPower launches the Pearl Project customer care and billing system in partnership with Oracle. It is the Aboiz Group’s Group’s largest single IT project to date. • AEV launches the Groupwide Sustainability Program and forms a dedicated Sustainability Team with a network of stewards across business units.
2010 • AEV fully acquires thri bank unit CitySavings.
• Therma Marine, Inc. assumes ownership of two power barges in Agusan del Norte and Compostela Valley with a total capacity of nearly 200 MW. • Cebu Energy Development Corporaon begins operaons of its 246-MW baseload power plant in Toledo City, Cebu. • AEV sells ATS in order to streamline its businesses and enhance focus on other core units.
2011 • Therma Mobile, Inc. acquires four diesel-powered barges in Navotas City with a total capacity of 242 MW.
2012
• AEV ventures into biogas producon, partnering with UK’s GazAsia to form Aseagas Corporaon.
• AEV acquires land development unit AboizLand from Aboiz and Company. • WeatherPhilippines Foundaon is established by the Aboiz Foundaon in partnership with UnionBank and Europe’s leading weather specialist, MeteoGroup. • Pilmico celebrates its 50th anniversary.
rm’s entry into the Luzon market. • Hedcor celebrates its 35th anniversary. • Under its #BangonVisayas campaign, the Aboiz Group raises over P264 million for relief and rehabilitaon eorts in the aermath of Typhoon Yolanda. Yolanda. It is the Foundaon’s largest CSR eort to date.
2013
2014
• AEV moves its corporate headquarters from Cebu to Manila in order to secure its business posion and pursue future growth in the country’s capital. • UnionBank acquires CitySavings, consolidang AEV’s banking units. • AboizLand acquires industrial park developer LiMA Land, marking the
• The Aboiz Group launches BeerWorld, BeerWorld, a sustainability campaign that seeks to insll a mindset of doing well by doing good, always making the right long-term decisions that balance the interests of people, planet, and prot.
• AboizLand celebrates its 20th anniversary, marking two decades of nurturing communies. • Hedcor inaugurates the Tudaya 1 and 2 hydropower plants in Davao del Sur with a total capacity of 13.7 MW. • Pilmico enters the internaonal market, acquiring a 70% stake in leading Vietnamese aqua feed rm Vinh Hoan Corporaon. It also opens a representave oce in Indonesia, its rst in Southeast Asia. • AboizPower and TeaM Energy break ground on the 420-MW Pagbilao Unit 3 in Quezon. • The Aboiz Group exceeds its #BangonVisayas targets and turns over 272 classrooms in Yolandahit areas of northern Cebu.
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Milestones • UnionBank raises P5.1 billion in new capital aer a 90-million share oer.
2008 • The Aboiz Group Foundaon celebrates its 20th anniversary and changes its name to Aboiz Foundaon. It is now one of the largest CSR foundaons in the country. • AP Renewables, Inc. (APRI) acquires the 289-MW Tiwi geothermal plant in Albay and the 458-MW MakBan geothermal plant in Laguna and Batangas. • Pilmico inaugurates a new feed mill facility in Kiwalan Cove, Iligan City. • UnionBank launches its new brand posioning, Smart Banking, as well as a new corporate logo.
Ramon Aboiz, who had led the company since 1993. • AboizPower launches its refreshed brand identy, including a new logo and a brand promise. • AboizPower secures an Independent Power Producer Administrator contract for the 764-MW Pagbilao plant in Quezon. • AboizPower launches the Pearl Project customer care and billing system in partnership with Oracle. It is the Aboiz Group’s Group’s largest single IT project to date. • AEV launches the Groupwide Sustainability Program and forms a dedicated Sustainability Team with a network of stewards across business units.
• Therma Marine, Inc. assumes ownership of two power barges in Agusan del Norte and Compostela Valley with a total capacity of nearly 200 MW. • Cebu Energy Development Corporaon begins operaons of its 246-MW baseload power plant in Toledo City, Cebu. • AEV sells ATS in order to streamline its businesses and enhance focus on other core units.
2011 • Therma Mobile, Inc. acquires four diesel-powered barges in Navotas City with a total capacity of 242 MW.
2012
• AEV ventures into biogas producon, partnering with UK’s GazAsia to form Aseagas Corporaon.
2010
2009
• AEV fully acquires thri bank unit CitySavings.
• Erramon I. Aboiz is elected AEV President and CEO, replacing Jon
. c n I , s e r u t n e V y t i u q E z i t i o b A
• AEV acquires land development unit AboizLand from Aboiz and Company. • WeatherPhilippines Foundaon is established by the Aboiz Foundaon in partnership with UnionBank and Europe’s leading weather specialist, MeteoGroup. • Pilmico celebrates its 50th anniversary.
rm’s entry into the Luzon market. • Hedcor celebrates its 35th anniversary. • Under its #BangonVisayas campaign, the Aboiz Group raises over P264 million for relief and rehabilitaon eorts in the aermath of Typhoon Yolanda. Yolanda. It is the Foundaon’s largest CSR eort to date.
2013
2014
• AEV moves its corporate headquarters from Cebu to Manila in order to secure its business posion and pursue future growth in the country’s capital. • UnionBank acquires CitySavings, consolidang AEV’s banking units. • AboizLand acquires industrial park developer LiMA Land, marking the
• The Aboiz Group launches BeerWorld, BeerWorld, a sustainability campaign that seeks to insll a mindset of doing well by doing good, always making the right long-term decisions that balance the interests of people, planet, and prot.
• AboizLand celebrates its 20th anniversary, marking two decades of nurturing communies. • Hedcor inaugurates the Tudaya 1 and 2 hydropower plants in Davao del Sur with a total capacity of 13.7 MW. • Pilmico enters the internaonal market, acquiring a 70% stake in leading Vietnamese aqua feed rm Vinh Hoan Corporaon. It also opens a representave oce in Indonesia, its rst in Southeast Asia. • AboizPower and TeaM Energy break ground on the 420-MW Pagbilao Unit 3 in Quezon. • The Aboiz Group exceeds its #BangonVisayas targets and turns over 272 classrooms in Yolandahit areas of northern Cebu.
8
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At A Glance Power
Banking
Generaon
Land
Food
Corporate Social Responsibility
Distribuon
WeatherPhilippines
Aboiz Foundaon
2014 Operang Highlights
2014 Operang Highlights
2014 Operang Highlights
2014 Operang Highlight s
2014 Operang Highlights
2014 Operang Highlights
2014 Operang Highlights
• Aributable net generaon generaon was up by 3% to 11,272 GWh • Capacity sales rose by 13% to 1,800 MW • Completed the 13.7-MW Tudaya hydropower plants in Davao • Secured 40-MW supply from the Unied Leyte Geothermal Power Plant complex as an Independent Power Producer (IPP) administrator • Net sellable capacity of Therma Mobile increased to 200 MW aer rehabilitaon of its barge units and transmission lines • Pagbilao Energy began construcon of 420-MW Pagbilao III coal-red power plant
• Aggregate energy sales sales grew by 10% to 4,480 GWh • Total DU customer customer base went up by 4% to 843,802 • VECO completed its rst one-kilometer underground distribuon system in Cebu, from the Provincial Capitol to the Fuente Osmeña Circle; two 100-megavolt ampere power transformers commissioned • Davao Light began a seven-year project to build a robust and reliable distribuon network with the installaon of a 69-kV loop system. • Cotabato Light’s franchise franchise was renewed for an addional 25 years
• Income from UnionBank’s customer businesses rose to P15.7 billion, driven by higher interest income on loans and fee-based income • Total resources resources expanded by 12% to P443.1 billion, funded mainly by the increase in bills payable to P48.4 billion coupled with solid growth in total deposits to P311.1 billion • Sustained double-digit expansion in average credit porolio, up by 13% to P125.0 billion fuelled by salary loans
• Posted P20 billion annual revenue and recorded a 12% year-on-year (YOY) hike, largely driven by strengthened volume growth • Full- year Food Group EBITDA grew by 12% YOY, including a 64% YOY growth in Farms’ EBITDA • Full-yea r contribuon to AEV up by 4% to P1.3 billion • Entere d ASEAN market with acquision of 70% equity stake in Vietnam-based feed mill operator Vinh Hoan 1 Feed JSC, and opened rst representave oce in Indonesia • Launched Mahalin Pagkaing An advocacy to support sustainable backyard farming; inially launched in typhoon Yolanda-aectedareas
• AboizLand marked its 20th anniversary • Revenues across all business units units up by 86% • Residenal sales grew 15% driven by sales from high-end projects • Posted 123% growth from commercial commercial segment • Achieved 100% occupancy for for The Outlets at Pueblo Verde within six months of operaons • Full acquision of LiMA Land, Inc. contributed 58% of total net i ncome aer taxes
• Combined Aboiz Group CSR iniaves totaled P610 million, the biggest allocaon to date • Intensied the development development of special science elementary schools (SSES) and technical vocaonal (techvoc) high schools • Donated 272 classrooms in Northern Cebu as part of its post-Yolanda school rehabilitaon iniaves • Released P14.8 million in loan packages to various organized groups naonwide
• Deployed 750 automated weather staons (AWS) naonwide as of end-
Net Income Contribuon to AEV (in Php)
Net Income Contribuon to AEV (in Php)
Net Income Contribuon to AEV (in Php)
Net Income Contribuon to AEV (in Php)
Net Income Contribuon to AEV (in Php)
Aboiz Group CSR Allocaon (in Php)
Total Donaons Received (in Php)
17.5B
2.5B 2.5B
11.7B 10.4B
B B 1.3B 1.3B 1.3B
3.9B 4.1B 3.2B
2.2B
2 3 . B . 1 1 3 . 1
633M
273.5M 63M*
2012
2013
2014
2012
2013
2014
2012
2013
2014
2012 201 2
2012 201 2
2013 201 3
2013 2014
2012
531M
2012 2013 2014
2013
2014
• Trained 435 LGUs and 860 disaster-risk disaster-risk reducon ocers • Signed a 10-year partnership partnership with planum donor LBC Express, Inc. • Partnered with DepEd for for weather educaon in the Philippines • Organized #WeatherWiser #WeatherWiser Naon conference and launched a campaign to use weather informaon in decision-making and planning • Recognized by three internaonal internaonal award-giving bodies, namely APEX Global, CMO Asia, and Public Aairs Asia
20122013
125M
483M
From Aboiz Group
2014
27.4M
610M
20132014 From Partners
2014
. c n I , s e r u t n e V y t i u q E z i t i o b A
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2015 Outlook
2015 Outlook
2015 Outlook
2015 Outlook
2015 Outlook
2015 Outlook
2015 Outlook
• Complete construcon of Hedcor Sabangan’s 14-MW hydro plant in Mt. Province • Therma South’s 300-MW coal-red plant in Davao to go online within the year • Begin construcon of of Hedcor’s 68-MW Manolo Forch hydro plant in Bukidnon, and Therma Visayas’ 340-MW coal-red plant in Cebu
• Start implementaon of Hawkeye Smart Elevated Meter Cluster technology across the enre Distribuon Group • Roll out Quanrisk Energy Management to other ulies aer its successful deployment at VECO • Go live with Oracle’s Meter Data Management by year-end 2015 • Connue underground cabling in VECO’s franchise area and start it in Davao
• Grow retail assets, assets, parcularly credit card, mortgage, and salary loans • Broaden customer franchise by pursuing high-return retail businesses and grow fee-based transacons • Strengthen risk management at an enterprise level, and sustain deposit build-up by focusing on CASA (current and saving accounts) • C onnue building up the unique “MakeDa Di” culture culture by enabling communies through Smart Banking in the spirit of Ubuntu
• Increase feeds producon producon capacies in Iligan and Tarlac • Increase sow level to to 14,000 heads and build addional farm facilies • Expand aqua feed mill in Vietnam, and set up a Pilmico representave oce in Ho Chi Minh • Export our around ASEAN region and pursue other opportunies through mergers and acquisions • Build a Pilmico Research Research & Training Bakery in Cebu
• Pursue aggressive investment investment plan in response to increasing market demands • Connue oering dierenated dierenated services and aordable innovave products • Further build organizaonal organizaonal capabilies to serve the growing market both in Cebu and in the naonal arena
• Work towards achieving CSR 2.0, which involves bigger programs with sustainable benets, naonwide in scope, aligned to Aboiz core businesses, and encourage more parcipaon from team members. • Achieve universal public educaon by connuing to establish and develop Aboiz BeerWorld schools through SSES and techvoc schools • Improve community livelihood and employment opportunies by expanding micronance base • Minimize environmental impact by connuing to conceptualize and idenfy viable programs • Undertake projects that addressthe health and well-being of communies, including fund drives for disaster relief and rehabilitaon eorts
• Connue deployment of 250 more AWS naonwide • Conduct Weather 101 trainings with LGUs to include module on storm-tracking and simulaon exercises on disaster risk reducon • Partner with SBUs in sharing experse on emergency response with LGUs • Connue to build a #WeatherWiser Naon through trainings, communicaon, and partnerships.
Light
• Davao Light to expand e-Bill service to all its customers
*Onlythefourthquarter2012incomecontribuonis reected,followingthefullacquisionofAboizLandby AEVinthesameperiod.AboizLandwaspreviouslyowned byAboizandCompany.
t r o p e R l a u n n A
4 1 0 2
11
At A Glance Power
Banking
Generaon
Land
Food
Corporate Social Responsibility
Distribuon
WeatherPhilippines
Aboiz Foundaon
2014 Operang Highlights
2014 Operang Highlights
2014 Operang Highlights
2014 Operang Highlight s
2014 Operang Highlights
2014 Operang Highlights
2014 Operang Highlights
• Aributable net generaon generaon was up by 3% to 11,272 GWh • Capacity sales rose by 13% to 1,800 MW • Completed the 13.7-MW Tudaya hydropower plants in Davao • Secured 40-MW supply from the Unied Leyte Geothermal Power Plant complex as an Independent Power Producer (IPP) administrator • Net sellable capacity of Therma Mobile increased to 200 MW aer rehabilitaon of its barge units and transmission lines • Pagbilao Energy began construcon of 420-MW Pagbilao III coal-red power plant
• Aggregate energy sales sales grew by 10% to 4,480 GWh • Total DU customer customer base went up by 4% to 843,802 • VECO completed its rst one-kilometer underground distribuon system in Cebu, from the Provincial Capitol to the Fuente Osmeña Circle; two 100-megavolt ampere power transformers commissioned • Davao Light began a seven-year project to build a robust and reliable distribuon network with the installaon of a 69-kV loop system. • Cotabato Light’s franchise franchise was renewed for an addional 25 years
• Income from UnionBank’s customer businesses rose to P15.7 billion, driven by higher interest income on loans and fee-based income • Total resources resources expanded by 12% to P443.1 billion, funded mainly by the increase in bills payable to P48.4 billion coupled with solid growth in total deposits to P311.1 billion • Sustained double-digit expansion in average credit porolio, up by 13% to P125.0 billion fuelled by salary loans
• Posted P20 billion annual revenue and recorded a 12% year-on-year (YOY) hike, largely driven by strengthened volume growth • Full- year Food Group EBITDA grew by 12% YOY, including a 64% YOY growth in Farms’ EBITDA • Full-yea r contribuon to AEV up by 4% to P1.3 billion • Entere d ASEAN market with acquision of 70% equity stake in Vietnam-based feed mill operator Vinh Hoan 1 Feed JSC, and opened rst representave oce in Indonesia • Launched Mahalin Pagkaing An advocacy to support sustainable backyard farming; inially launched in typhoon Yolanda-aectedareas
• AboizLand marked its 20th anniversary • Revenues across all business units units up by 86% • Residenal sales grew 15% driven by sales from high-end projects • Posted 123% growth from commercial commercial segment • Achieved 100% occupancy for for The Outlets at Pueblo Verde within six months of operaons • Full acquision of LiMA Land, Inc. contributed 58% of total net i ncome aer taxes
• Combined Aboiz Group CSR iniaves totaled P610 million, the biggest allocaon to date • Intensied the development development of special science elementary schools (SSES) and technical vocaonal (techvoc) high schools • Donated 272 classrooms in Northern Cebu as part of its post-Yolanda school rehabilitaon iniaves • Released P14.8 million in loan packages to various organized groups naonwide
• Deployed 750 automated weather staons (AWS) naonwide as of end-
Net Income Contribuon to AEV (in Php)
Net Income Contribuon to AEV (in Php)
Net Income Contribuon to AEV (in Php)
Net Income Contribuon to AEV (in Php)
Net Income Contribuon to AEV (in Php)
Aboiz Group CSR Allocaon (in Php)
Total Donaons Received (in Php)
17.5B
2.5B 2.5B
11.7B 10.4B
3.9B 4.1B 3.2B
2.2B
B B 1.3B 1.3B 1.3B 2 3 . B . 1 1 3 . 1
633M
2012
2013
2014
2012
2013
2014
2012
2013
2014
2012 201 2
2012 201 2
20122013
531M
2013 201 3
2013 2014
125M
2013
273.5M 63M*
2012
2014
• Trained 435 LGUs and 860 disaster-risk disaster-risk reducon ocers • Signed a 10-year partnership partnership with planum donor LBC Express, Inc. • Partnered with DepEd for for weather educaon in the Philippines • Organized #WeatherWiser #WeatherWiser Naon conference and launched a campaign to use weather informaon in decision-making and planning • Recognized by three internaonal internaonal award-giving bodies, namely APEX Global, CMO Asia, and Public Aairs Asia
483M
From Aboiz Group
2014
27.4M
20132014
610M
2012 2013 2014
From Partners
2014
. c n I , s e r u t n e V y t i u q E z i t i o b A
2015 Outlook
2015 Outlook
2015 Outlook
2015 Outlook
2015 Outlook
2015 Outlook
2015 Outlook
• Complete construcon of Hedcor Sabangan’s 14-MW hydro plant in Mt. Province • Therma South’s 300-MW coal-red plant in Davao to go online within the year • Begin construcon of of Hedcor’s 68-MW Manolo Forch hydro plant in Bukidnon, and Therma Visayas’ 340-MW coal-red plant in Cebu
• Start implementaon of Hawkeye Smart Elevated Meter Cluster technology across the enre Distribuon Group • Roll out Quanrisk Energy Management to other ulies aer its successful deployment at VECO • Go live with Oracle’s Meter Data Management by year-end 2015 • Connue underground cabling in VECO’s franchise area and start it in Davao
• Grow retail assets, assets, parcularly credit card, mortgage, and salary loans • Broaden customer franchise by pursuing high-return retail businesses and grow fee-based transacons • Strengthen risk management at an enterprise level, and sustain deposit build-up by focusing on CASA (current and saving accounts) • C onnue building up the unique “MakeDa Di” culture culture by enabling communies through Smart Banking in the spirit of Ubuntu
• Increase feeds producon producon capacies in Iligan and Tarlac • Increase sow level to to 14,000 heads and build addional farm facilies • Expand aqua feed mill in Vietnam, and set up a Pilmico representave oce in Ho Chi Minh • Export our around ASEAN region and pursue other opportunies through mergers and acquisions • Build a Pilmico Research Research & Training Bakery in Cebu
• Pursue aggressive investment investment plan in response to increasing market demands • Connue oering dierenated dierenated services and aordable innovave products • Further build organizaonal organizaonal capabilies to serve the growing market both in Cebu and in the naonal arena
• Work towards achieving CSR 2.0, which involves bigger programs with sustainable benets, naonwide in scope, aligned to Aboiz core businesses, and encourage more parcipaon from team members. • Achieve universal public educaon by connuing to establish and develop Aboiz BeerWorld schools through SSES and techvoc schools • Improve community livelihood and employment opportunies by expanding micronance base • Minimize environmental impact by connuing to conceptualize and idenfy viable programs • Undertake projects that addressthe health and well-being of communies, including fund drives for disaster relief and rehabilitaon eorts
• Connue deployment of 250 more AWS naonwide • Conduct Weather 101 trainings with LGUs to include module on storm-tracking and simulaon exercises on disaster risk reducon • Partner with SBUs in sharing experse on emergency response with LGUs • Connue to build a #WeatherWiser Naon through trainings, communicaon, and partnerships.
Light
• Davao Light to expand e-Bill service to all its customers
*Onlythefourthquarter2012incomecontribuonis reected,followingthefullacquisionofAboizLandby AEVinthesameperiod.AboizLandwaspreviouslyowned byAboizandCompany.
t r o p e R l a u n n A
4 1 0 2
10
11
A EV Financial Highlights
A EV Financia Financiall Summary Summar y
2014
% Change (2014 vs. 2013)
20 12
2 0 13
81,018 (58,073)
90,876 (69,653)
109,867 (85,321)
20.9%
Operang prot Equity in net earnings of associates Other charges
22,945 13,322 (4,210)
21,223 10,597 (4,725)
24,546 7,244 (4,199)
15.7% -31.6% -11.1%
Income before income tax Provision for income tax
32,057 (1,910)
27,095 (887)
27,591 (4,026)
1.8% 353.9%
Net Income before non-controlling interests Non-controllinginterests
30,147 (6,182)
26,208 (5,181)
23,565 (5,184)
-10.1%
N et et in co co me me a a ri ri bu bu ta ta bl bl e t o e qu qu it y h ol ol de de rs rs of of pa pa re re nt nt
2 3, 3, 96 96 5
21,027
18,381
-12.6%
40,871
36,492
38,356
5.1%
222,463 109,464 21,908 91,090
247,088 124,539 25,622 96,927
280,997 146,062 26,991 107,944
13.7% 17.3% 5.3% 11.4%
4.34 16.50 1.58 34.2% 2.57 0.97 0.45
3.81 17.55 2.00 25.3% 2.64 1.02 0.48
3.32 19.49 1.80
-12.9% 11.1% -10.0%
(in Php millions) Income Statement Revenues Operang costs & expenses
(in Php millions)
Revenues
109,867
2014 2013 2012
Net Income to Equity Holders of the Parent
EBITDA
90,876 81,018
2014 2013 2012
38,356 36,492 40,871
2014 2013
18,381
EBITDA
2012
23,965 Financial Condion Total assets Total liabilies Non-controllinginterests Equity aributable to equity holders of the parent
Core Net Income
2014 2013 2012
Cash Dividend Paid to Common
17,945 21,006
23,424
2014 2013 2012
9,939
11,044 8,725
Cash and Cash Equivalents
2014 2013 2012
21,027
50,482 36,118 33,731
Raos Per Share (Pesos) Earnings Book Value Cash dividend to common Return on equity Current rao Debt/Equity Net debt/Equity
20.4%
2.76 1.08 0.50
Income Contribuon Breakdown Per Business Segment (in Php millions)
Power Equity Aributable to Equity Holders of the Parent
Total Assets
3,244
14,195
Market Capitalizaon
12,747
Land
Food
Banking
18,789
1,303 1,256
1,307
633 273
2014 2013 2012
280,997
247,088 222,463
2014 2013 2012
107,944 96,927 91,090
2014 2013 2012
291,883
63*
301,218 292,383
2013 2014
2012
2012 2013 2014
2012 2013 2014
2012
2013 2014
Equity Investment Breakdown . c n I , s e r u t n e V y t i u q E z i t i o b A
Per Business Segment (in Php millions)
Power 62,246
71,098
67,379
Land
Food
Banking
26,307
4,544 3,741
8,559
3,695 5,505 3,733
2012
2013 2014
2012 2013 2014
2012
2013 2014
2012
2013 2014
t r o p e R l a u n n A
4 1 0 2
*Onlythefourthquarter2012incomeco er2012incomecontribuonisreected,followingthefullacquisionofAboizLandbyAEVinthesameperiod.AboizLandwaspreviouslyownedbyAboizandCompany.
12
13
A EV Financial Highlights
A EV Financia Financiall Summary Summar y
2014
% Change (2014 vs. 2013)
20 12
2 0 13
81,018 (58,073)
90,876 (69,653)
109,867 (85,321)
20.9%
Operang prot Equity in net earnings of associates Other charges
22,945 13,322 (4,210)
21,223 10,597 (4,725)
24,546 7,244 (4,199)
15.7% -31.6% -11.1%
Income before income tax Provision for income tax
32,057 (1,910)
27,095 (887)
27,591 (4,026)
1.8% 353.9%
Net Income before non-controlling interests Non-controllinginterests
30,147 (6,182)
26,208 (5,181)
23,565 (5,184)
-10.1%
N et et in co co me me a a ri ri bu bu ta ta bl bl e t o e qu qu it y h ol ol de de rs rs of of pa pa re re nt nt
2 3, 3, 96 96 5
21,027
18,381
-12.6%
40,871
36,492
38,356
5.1%
222,463 109,464 21,908 91,090
247,088 124,539 25,622 96,927
280,997 146,062 26,991 107,944
13.7% 17.3% 5.3% 11.4%
4.34 16.50 1.58 34.2% 2.57 0.97 0.45
3.81 17.55 2.00 25.3% 2.64 1.02 0.48
3.32 19.49 1.80
-12.9% 11.1% -10.0%
(in Php millions) Income Statement Revenues Operang costs & expenses
(in Php millions)
Revenues
Net Income to Equity Holders of the Parent
EBITDA
109,867
2014
90,876
2013
81,018
2012
2014 2013 2012
38,356 36,492 40,871
18,381
2014
EBITDA
23,965
2012
Financial Condion Total assets Total liabilies Non-controllinginterests Equity aributable to equity holders of the parent
Core Net Income
Cash Dividend Paid to Common
17,945
2014
21,006
2013
23,424
2012
2014 2013 2012
9,939
11,044 8,725
Cash and Cash Equivalents
50,482
2014 2013 2012
21,027
2013
36,118 33,731
Raos Per Share (Pesos) Earnings Book Value Cash dividend to common Return on equity Current rao Debt/Equity Net debt/Equity
20.4%
2.76 1.08 0.50
Income Contribuon Breakdown Per Business Segment (in Php millions)
Power Equity Aributable to Equity Holders of the Parent
Total Assets
1,303 1,256
3,244
14,195
Market Capitalizaon
12,747
Land
Food
Banking
18,789
1,307
633 273
280,997
2014
247,088
2013
222,463
2012
2014 2013 2012
107,944 96,927 91,090
291,883
2014
63*
301,218
2013
292,383
2012
2013 2014
2012
2012 2013 2014
2012 2013 2014
2012
2013 2014
Equity Investment Breakdown Per Business Segment (in Php millions)
. c n I , s e r u t n e V y t i u q E z i t i o b A
Power 62,246
71,098
26,307
67,379
Land
Food
Banking
4,544 3,741
8,559
3,695 5,505 3,733
2012
2013 2014
2012 2013 2014
2012
2013 2014
2012
2013 2014
t r o p e R l a u n n A
4 1 0 2
*Onlythefourthquarter2012incomeco er2012incomecontribuonisreected,followingthefullacquisionofAboizLandbyAEVinthesameperiod.AboizLandwaspreviouslyownedbyAboizandCompany.
12
13
AboitizPower Financial Highlights
AboitizPower Financia Financiall Summary Summar y
2014
% Change (2014 vs. 2013)
20 12
2 0 13
Operang revenues Operang expenses
62,153 41,697
72,055 52,578
86,759 64,409
20% 23%
Operang prot Share in net earnings of associates Other charges
20,456 9,940 (4,089)
19,477 6,474 (6,014)
22,351 4,009 (4,930)
15% -38% -18%
Income before income tax Provision for income tax
26,306 1,391
19,938 527
21,430 3,424
7% 550%
Net income before non-controlling interests Net income aributable to non-controlling interests
24,916 (490)
19,411 (834)
18,006 (1,301)
-7% 56%
Net income income aribu aributab table le to equity equity holder holderss of the parent parent
24,42 24,426 6
18,57 18,577 7
16,705
-10%
34,242
29,900
31,765
6%
163,105 80,646 1,566 80,893
193,939 102,688 3,622 87,629
216,761 120,681 4,118 91,962
12% 18% 14% 5%
3.32 10.99 1.54 40% 2.65 0.98 0.44
2.52 11.91 1.66 27% 2.87 1.13 0.52
2.27 12.50 1.66 21% 3.36 1.26 0.59
-10% 5% 0%
(in Php millions) Income Statement
(in Php millions)
Revenues
86,759
2014 2013 2012
Net Income to Equity Holders of the Parent*
EBITDA
72,055 62,153
2014 2013 2012
31,765 29,900
34,242
2014 2013 2012
16,705 18,577 24,426
EBITDA Financial Condion Total assets Total liabilies Non-controllinginterests Equity aributable to equity holders of the parent
Core Net Income
2014 2013 2012
Cash Dividend Paid to Common
16,841 20,124 23,702
2014 2013 2012
Cash and Cash Equivalents
12,215
2014
12,215
2013
31,383
2012
30,678
11,332
40,232
Raos Per Share (Pesos) Earnings Book Value Cash dividend to common Return on equity Current rao Debt/Equity Net debt/Equity
Income Contribuon
Aributable Power Sales
Per Business Segment (in Php millions)
(in GWh)
Generaon Equity Aributable to Equity Holders of the Parent
Total Assets 2014 2013 2012
216,761 193,939
163,105
2014 2013 2012
91,962 87,629 80,893
22,758
Market Capitalizaon 2014 2013 2012
14
10,949
11,272
2012
2013
2014
315,684 250,193
15,226
Generaon
13,476 Distribuon
271,900 Parent & Others
n o i t a r o p r o C r e w o P z i t i o b A
10,660
2,805
3,227
Distribuon
3,203
*AboizPower
124
26
3,934
4,076
4,480
2012
2013
2014
(1,138) 2012
2013
2014
t r o p e R l a u n n A
4 1 0 2
15
AboitizPower Financial Highlights
AboitizPower Financia Financiall Summary Summar y
2014
% Change (2014 vs. 2013)
20 12
2 0 13
Operang revenues Operang expenses
62,153 41,697
72,055 52,578
86,759 64,409
20% 23%
Operang prot Share in net earnings of associates Other charges
20,456 9,940 (4,089)
19,477 6,474 (6,014)
22,351 4,009 (4,930)
15% -38% -18%
Income before income tax Provision for income tax
26,306 1,391
19,938 527
21,430 3,424
7% 550%
Net income before non-controlling interests Net income aributable to non-controlling interests
24,916 (490)
19,411 (834)
18,006 (1,301)
-7% 56%
Net income income aribu aributab table le to equity equity holder holderss of the parent parent
24,42 24,426 6
18,57 18,577 7
16,705
-10%
34,242
29,900
31,765
6%
163,105 80,646 1,566 80,893
193,939 102,688 3,622 87,629
216,761 120,681 4,118 91,962
12% 18% 14% 5%
3.32 10.99 1.54 40% 2.65 0.98 0.44
2.52 11.91 1.66 27% 2.87 1.13 0.52
2.27 12.50 1.66 21% 3.36 1.26 0.59
-10% 5% 0%
(in Php millions) Income Statement
(in Php millions)
Revenues
86,759
2014 2013 2012
Net Income to Equity Holders of the Parent*
EBITDA
72,055 62,153
2014 2013 2012
31,765 29,900
34,242
2014 2013 2012
16,705 18,577 24,426
EBITDA Financial Condion Total assets Total liabilies Non-controllinginterests Equity aributable to equity holders of the parent
Core Net Income
2014 2013 2012
Cash Dividend Paid to Common
16,841 20,124 23,702
Cash and Cash Equivalents
2014
12,215
2014
2013
12,215
2013
31,383
2012
30,678
2012
11,332
40,232
Raos Per Share (Pesos) Earnings Book Value Cash dividend to common Return on equity Current rao Debt/Equity Net debt/Equity
Income Contribuon
Aributable Power Sales
Per Business Segment (in Php millions)
(in GWh)
Generaon Equity Aributable to Equity Holders of the Parent
Total Assets 2014 2013 2012
216,761 193,939
163,105
2014 2013 2012
91,962 87,629 80,893
22,758
Market Capitalizaon 2014 2013 2012
10,949
11,272
2012
2013
2014
315,684 250,193
15,226
Generaon
13,476 Distribuon
271,900 Parent & Others
n o i t a r o p r o C r e w o P z i t i o b A
10,660
2,805
3,227
Distribuon
3,203
*AboizPower
124
26
3,934
4,076
4,480
2012
2013
2014
(1,138) 2012
2013
2014
14
t r o p e R l a u n n A
4 1 0 2
15
Chairmen’s Message
“Over the past two decades, whether through organic growth, strategic partnerships or acquisitions, we have remained disciplined and focused on our core competencies and strategic plans. Our end goal is to create long-term value for all our stakeholders, not just our shareholders but also our customers, team members, and our communities.”
Warmest greengs greengs to all of you! In 2014, the Philippines experienced GDP (gross domesc product) growth of 6.1%, falling short of the government’s 6.5-7.5% target for the year, year, mainly due to lower scal spending. This performance was, nonetheless, above market expectaons and posioned the country as Asia’s second fastestrising economy last year. Together with a favorable internaonal credit rang, and a record-seng record-seng stock market, all these indicate a good amount of condence in our economy. Both government and economic analysts are condent of achieving higher GDP growth in 2015 on the back of higher government spending, stronger private consumpon, stable OFW remiances, lower oil prices, and lower inaon. The Philippine market today certainly oers substanal opportunies for growth in all our core businesses, and we are eager to reap the benets of these excing growth prospects.
. c n I , s e r u t n e V y t i u q E z i t i o b A
16
20 Years of Creang Long-Term Value In 2014, Aboiz Equity Ventures (AEV) celebrated its 20th lisng anniversary at the Philippine Stock Exchange (PSE), and its inial public oering (IPO) was the inecon point that fueled our company’s explosive growth. growth. Our IPO price in 1994 was P5.70 per share; today, aer adjusng it for stock dividends, it is approximately 15 mes its inial price. Our total return to shareholders over the past ve years is 46% compounded annually, and AEV is recognized as one of the best performers for a PSE-listed company. Today, Today, we also have one of the highest dividend yields among blue chip conglomerates. conglomerates.
We interpret the outstanding performance of the AEV stock price as a vote of condence and approval of our business policies, pracces, and strategic iniaves. Over the past two decades, whether through organic growth, strategic partnerships or acquisions, we have remained disciplined and focused on our core competencies and strategic plans. Our end goal is to create long-term value for all our stakeholders, not just our shareholders but also our customers, team members, and our communies. Group Strategy Just as it was in 1994 when there was much opmism in the air with many excing opportunies, today with sustained strong macroeconomic fundamentals and condence on the country’s economy, many growth and investment opportunies are available for the AEV Group.
Last year, the Board of Directors and the senior management group conducted an extensive review of the Group’s current and future strategy. We conrmed that the Philippine market sll oers new investment opportunies across all our core businesses and with the ASEAN integraon, there is an ever-increasing compeon from both local and foreign players. The Group’s four strategic pillars, which were discussed in last year’s annual report, are sll highly relevant to the direcon we intend to pursue. As we move forward, we will remain grounded on our commitment to grow and expand our business, increase stakeholder engagement, build human capital, and carry on execuon excellence in everything we do.
t r o p e R l a u n n A
4 1 0 2
17
Chairmen’s Message
“Over the past two decades, whether through organic growth, strategic partnerships or acquisitions, we have remained disciplined and focused on our core competencies and strategic plans. Our end goal is to create long-term value for all our stakeholders, not just our shareholders but also our customers, team members, and our communities.”
Warmest greengs greengs to all of you! In 2014, the Philippines experienced GDP (gross domesc product) growth of 6.1%, falling short of the government’s 6.5-7.5% target for the year, year, mainly due to lower scal spending. This performance was, nonetheless, above market expectaons and posioned the country as Asia’s second fastestrising economy last year. Together with a favorable internaonal credit rang, and a record-seng record-seng stock market, all these indicate a good amount of condence in our economy. Both government and economic analysts are condent of achieving higher GDP growth in 2015 on the back of higher government spending, stronger private consumpon, stable OFW remiances, lower oil prices, and lower inaon. The Philippine market today certainly oers substanal opportunies for growth in all our core businesses, and we are eager to reap the benets of these excing growth prospects. 20 Years of Creang Long-Term Value In 2014, Aboiz Equity Ventures (AEV) celebrated its 20th lisng anniversary at the Philippine Stock Exchange (PSE), and its inial public oering (IPO) was the inecon point that fueled our company’s explosive growth. growth. Our IPO price in 1994 was P5.70 per share; today, aer adjusng it for stock dividends, it is approximately 15 mes its inial price. Our total return to shareholders over the past ve years is 46% compounded annually, and AEV is recognized as one of the best performers for a PSE-listed company. Today, Today, we also have one of the highest dividend yields among blue chip conglomerates. conglomerates.
. c n I , s e r u t n e V y t i u q E z i t i o b A
We interpret the outstanding performance of the AEV stock price as a vote of condence and approval of our business policies, pracces, and strategic iniaves. Over the past two decades, whether through organic growth, strategic partnerships or acquisions, we have remained disciplined and focused on our core competencies and strategic plans. Our end goal is to create long-term value for all our stakeholders, not just our shareholders but also our customers, team members, and our communies. Group Strategy Just as it was in 1994 when there was much opmism in the air with many excing opportunies, today with sustained strong macroeconomic fundamentals and condence on the country’s economy, many growth and investment opportunies are available for the AEV Group.
Last year, the Board of Directors and the senior management group conducted an extensive review of the Group’s current and future strategy. We conrmed that the Philippine market sll oers new investment opportunies across all our core businesses and with the ASEAN integraon, there is an ever-increasing compeon from both local and foreign players. The Group’s four strategic pillars, which were discussed in last year’s annual report, are sll highly relevant to the direcon we intend to pursue. As we move forward, we will remain grounded on our commitment to grow and expand our business, increase stakeholder engagement, build human capital, and carry on execuon excellence in everything we do.
t r o p e R l a u n n A
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Chairmen’s Message
“The Group’s other core businesses - power, banking, food, and land are uniquely positioned to tap growth opportunities through expansion, acquisition, greeneld development for power, innovative products, expanded sales channels, new markets, partnerships and strategic alliances. While we remain rmly focused on growing our businesses in the Philippines, we will seek out strategic investment opportunities in the ASEAN region. We will not bet the farm but aim to take prudent and deliberate steps in planning and executing our investment plans.” Revising our growth strategy also gave us invaluable insight into the huge demand for infrastructure in local and regional markets. Encouraged by this development, we have added infrastructure infrastructure and infrastructure-related infrastructure-related businesses as the h leg of our core businesses. We foresee an enormous need for infrastructure investment and want to play a major role in this sector. We believe that venturing into the infrastructure sector meets our growth criteria of being able to tap into exisng core competencies. It is a business that is scalable and has a potenal to provide us with strong recurring prots and cash ow.
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The Group’s other core businesses�power, businesses�power, banking, food, and land�are uniquely posioned to tap growth opportunies through expansion, acquision, greeneld development for power, innovave products, expanded sales channels, new markets, partnerships and strategic alliances. While we remain rmly focused on growing our businesses in the Philippines, we will seek out strategic investment investment opportunies in the ASEAN region. We will not bet the farm but aim to take prudent and deliberate steps in planning and execung our investment plans.
Succession With the signicant growth of the Group’s businesses over the past few years, coupled with our future growth aspiraons, we would like to ensure a more seamless transion of leadership and the connued execuon of our long-term strategic plans.
In November 2014, the Board of Directors of Aboiz & Company, AEV, and AboizPower announced the deferment of the rerement of Group CEO Montxu Aboiz and AboizPower President and COO Tony Moraza to December 31, 2019. This means a threeyear extension for Montxu and a two-year extension for Tony. We are condent that in a few years, we will be ready for an easy handover of leadership. Our solid corporate governance structure has largely contributed to the success of the Group over the past 100 years, and this includes a smooth passing of the baton to the next group of leaders. Doing Well by Doing Good In 2014, we further strengthened our Group’s sustainability commitment with the launching of the Aboiz BeerWorld campaign. It communicates our sustainability mindset that we can do well by doing
good, always making the right long-term decisions that balance the interests of people, planet and prot. We developed key metrics for each focus area where we can make the biggest dierence in the lives of all our stakeholders. stakeholders. In our commitment to transparency, transparency, we apply internaonal benchmarks in all our sustainability eorts. Starng in 2014, we have been preparing our Group’s Sustainability Report using the GRI’s G4 Reporng Framework. Framework. This allows us to focus on performance indicators indicators that are crical and important to our business and our key stakeholders. We are doing good by living out our core value of responsibility through our corporate social responsibility (CSR) iniaves in the Aboiz Foundaon and WeatherPhilippines Foundaon. Since the late 1980s, the Group’s eorts have evolved evolved from CSR 1.0, or si mple philanthropic acvies, to CSR 2.0 that involves more sustainable projects with longer-term longer-term benets for our beneciaries. This means engaging more eecve programs that address community needs, especially in our focus areas of educaon, enterprise development, environment, environment, health, and well - being, are naonal in scale, and encourage more parcipaon from our team members.
Message of Thanks As a nal word, we thank you, our dear shareholders, for your unwavering trust and condence in our company. Our deep appreciaon also goes out to all our business partners, host communies, and customers across the country for their invaluable partnership. We also pay tribute to all our team members across the Aboiz Group for their commitment and contribuon, truly driven by the Aboiz Passion for Beer Ways.
In 2015, we mark the 95th anniversary of our parent company, Aboiz & Company. This important milestone reminds us of our storied journey from a private, family-owned business to a publicly held company that has touched the lives of so many of our stakeholders. To all our stakeholders, thank you for being our partners in this exhilarang journey of growth.
Jon Ramon Aboiz
Enrique M. Aboiz
Chairman of the Board Aboiz Equity Ventures, Inc.
Chairman of the Board Aboiz Power Corporaon
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Chairmen’s Message
“The Group’s other core businesses - power, banking, food, and land are uniquely positioned to tap growth opportunities through expansion, acquisition, greeneld development for power, innovative products, expanded sales channels, new markets, partnerships and strategic alliances. While we remain rmly focused on growing our businesses in the Philippines, we will seek out strategic investment opportunities in the ASEAN region. We will not bet the farm but aim to take prudent and deliberate steps in planning and executing our investment plans.” Revising our growth strategy also gave us invaluable insight into the huge demand for infrastructure in local and regional markets. Encouraged by this development, we have added infrastructure infrastructure and infrastructure-related infrastructure-related businesses as the h leg of our core businesses. We foresee an enormous need for infrastructure investment and want to play a major role in this sector. We believe that venturing into the infrastructure sector meets our growth criteria of being able to tap into exisng core competencies. It is a business that is scalable and has a potenal to provide us with strong recurring prots and cash ow.
. c n I , s e r u t n e V y t i u q E z i t i o b A
The Group’s other core businesses�power, businesses�power, banking, food, and land�are uniquely posioned to tap growth opportunies through expansion, acquision, greeneld development for power, innovave products, expanded sales channels, new markets, partnerships and strategic alliances. While we remain rmly focused on growing our businesses in the Philippines, we will seek out strategic investment investment opportunies in the ASEAN region. We will not bet the farm but aim to take prudent and deliberate steps in planning and execung our investment plans.
Succession With the signicant growth of the Group’s businesses over the past few years, coupled with our future growth aspiraons, we would like to ensure a more seamless transion of leadership and the connued execuon of our long-term strategic plans.
In November 2014, the Board of Directors of Aboiz & Company, AEV, and AboizPower announced the deferment of the rerement of Group CEO Montxu Aboiz and AboizPower President and COO Tony Moraza to December 31, 2019. This means a threeyear extension for Montxu and a two-year extension for Tony. We are condent that in a few years, we will be ready for an easy handover of leadership.
good, always making the right long-term decisions that balance the interests of people, planet and prot. We developed key metrics for each focus area where we can make the biggest dierence in the lives of all our stakeholders. stakeholders. In our commitment to transparency, transparency, we apply internaonal benchmarks in all our sustainability eorts. Starng in 2014, we have been preparing our Group’s Sustainability Report using the GRI’s G4 Reporng Framework. Framework. This allows us to focus on performance indicators indicators that are crical and important to our business and our key stakeholders. We are doing good by living out our core value of responsibility through our corporate social responsibility (CSR) iniaves in the Aboiz Foundaon and WeatherPhilippines Foundaon. Since the late 1980s, the Group’s eorts have evolved evolved from CSR 1.0, or si mple philanthropic acvies, to CSR 2.0 that involves more sustainable projects with longer-term longer-term benets for our beneciaries. This means engaging more eecve programs that address community needs, especially in our focus areas of educaon, enterprise development, environment, environment, health, and well - being, are naonal in scale, and encourage more parcipaon from our team members.
Message of Thanks As a nal word, we thank you, our dear shareholders, for your unwavering trust and condence in our company. Our deep appreciaon also goes out to all our business partners, host communies, and customers across the country for their invaluable partnership. We also pay tribute to all our team members across the Aboiz Group for their commitment and contribuon, truly driven by the Aboiz Passion for Beer Ways.
In 2015, we mark the 95th anniversary of our parent company, Aboiz & Company. This important milestone reminds us of our storied journey from a private, family-owned business to a publicly held company that has touched the lives of so many of our stakeholders. To all our stakeholders, thank you for being our partners in this exhilarang journey of growth.
Jon Ramon Aboiz
Enrique M. Aboiz
Chairman of the Board Aboiz Equity Ventures, Inc.
Chairman of the Board Aboiz Power Corporaon
Our solid corporate governance structure has largely contributed to the success of the Group over the past 100 years, and this includes a smooth passing of the baton to the next group of leaders.
t r o p e R l a u n n A
Doing Well by Doing Good In 2014, we further strengthened our Group’s sustainability commitment with the launching of the Aboiz BeerWorld campaign. It communicates our sustainability mindset that we can do well by doing
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CEO’s Message
“Our disciplined investment approach hinges on two very basic criteria: covering our cost of equity and a bias for strong cash ow. This has allowed us to fund our expansion program while at the same time pay out generous annual cash dividends.”
Since going public two decades ago, the AEV Group has become one of the country’s largest conglomerates in terms of market capitalizaon. capitalizaon. Both AEV and AboizPower are recognized as two of the best performers at the Philippine Stock Exchange in terms of total return to shareholders and dividend yield among blue chip companies. Our disciplined investment approach hinges on two very basic criteria: covering our cost of equity and a bias for strong cash ow. This has allowed us to fund our expansion program while at the same me pay out generous annual cash dividends to all of you. Over the years, we have been true to our dividend policy of paying out at least one-third of the previous year’s earnings for AEV, and one-half of the prior year’s earnings for AboizPower, and at mes even exceeding it. You will also see from our CFO’s report that our balance sheet remains to be very strong and we have ample capacity to lever it up as we pursue investment opportunies. With the Group’s success over the past 20 years, our challenge is to outperform ourselves. We will connue to roll up our sleeves, raring to take even bigger and bolder steps towards achieving our growth aspiraons.
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Performance of our Strategic Business Units AEV closed 2014 with a consolidated net income of P18.4 billion, 13% lower than in the previous year. The decline, which was ancipated, was due to lower contribuons from our power and banking business units.
The power business connues to provide the lion’s share of your company’s consolidated net income at 71%, followed by the banking, food, and land units.
We expect 2015 earnings to be beer than last year with the commissioning of several power plants. Our strategic growth plans remain intact as we pursue to further strengthen and expand our businesses, in keeping pace with the country’s economic growth. Power AboizPower’s income contribuon to AEV amounted to P12.7 billion, a 10% decrease from the previous year. The drop in earnings was due to the full-year impact of the new steam supply agreement, the Geothermal Resource Sales Contract (GRSC), of our Ti wi-MakBan plants, limited operaons at the Magat plant due to low water levels, and the expiraon of the Pagbilao and Magat plants’ income tax holidays. Our large hydro plants were also adversely aected by lower average prices for both spot and ancillary services sales.
In 2015, our total aributable net sellable generang capacity will increase from 2,250 megawas (MW) to 2,532 MW, with the addion of 8 MW from the opmizaon of Binga hydro plant, and the commissioning of the 14-MW Sabangan hydro plant, and 260-MW (net) Davao coal plant. While power supply in Mindanao connued to be a challenge, outages in our distribuon ulies were kept to a minimum thanks to our embedded power plants in Davao Light and Cotabato Light, as well as the parcipaon of many large customers in the Interrupble Load Program (ILP). The ILP, which VECO pioneered in 2010, has proven to be a viable, praccal and cost-ecient soluon to address a short-term power shortage. We fully support the ILP and believe it will play a key role in increasing power reserves in the Luzon grid this summer. As part of our program to increase our power generaon capacity by over 2,000 MW over the next
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CEO’s Message
“Our disciplined investment approach hinges on two very basic criteria: covering our cost of equity and a bias for strong cash ow. This has allowed us to fund our expansion program while at the same time pay out generous annual cash dividends.”
Since going public two decades ago, the AEV Group has become one of the country’s largest conglomerates in terms of market capitalizaon. capitalizaon. Both AEV and AboizPower are recognized as two of the best performers at the Philippine Stock Exchange in terms of total return to shareholders and dividend yield among blue chip companies. Our disciplined investment approach hinges on two very basic criteria: covering our cost of equity and a bias for strong cash ow. This has allowed us to fund our expansion program while at the same me pay out generous annual cash dividends to all of you. Over the years, we have been true to our dividend policy of paying out at least one-third of the previous year’s earnings for AEV, and one-half of the prior year’s earnings for AboizPower, and at mes even exceeding it. You will also see from our CFO’s report that our balance sheet remains to be very strong and we have ample capacity to lever it up as we pursue investment opportunies. With the Group’s success over the past 20 years, our challenge is to outperform ourselves. We will connue to roll up our sleeves, raring to take even bigger and bolder steps towards achieving our growth aspiraons. Performance of our Strategic Business Units AEV closed 2014 with a consolidated net income of P18.4 billion, 13% lower than in the previous year. The decline, which was ancipated, was due to lower contribuons from our power and banking business units.
. c n I , s e r u t n e V y t i u q E z i t i o b A
The power business connues to provide the lion’s share of your company’s consolidated net income at 71%, followed by the banking, food, and land units.
We expect 2015 earnings to be beer than last year with the commissioning of several power plants. Our strategic growth plans remain intact as we pursue to further strengthen and expand our businesses, in keeping pace with the country’s economic growth. Power AboizPower’s income contribuon to AEV amounted to P12.7 billion, a 10% decrease from the previous year. The drop in earnings was due to the full-year impact of the new steam supply agreement, the Geothermal Resource Sales Contract (GRSC), of our Ti wi-MakBan plants, limited operaons at the Magat plant due to low water levels, and the expiraon of the Pagbilao and Magat plants’ income tax holidays. Our large hydro plants were also adversely aected by lower average prices for both spot and ancillary services sales.
In 2015, our total aributable net sellable generang capacity will increase from 2,250 megawas (MW) to 2,532 MW, with the addion of 8 MW from the opmizaon of Binga hydro plant, and the commissioning of the 14-MW Sabangan hydro plant, and 260-MW (net) Davao coal plant. While power supply in Mindanao connued to be a challenge, outages in our distribuon ulies were kept to a minimum thanks to our embedded power plants in Davao Light and Cotabato Light, as well as the parcipaon of many large customers in the Interrupble Load Program (ILP). The ILP, which VECO pioneered in 2010, has proven to be a viable, praccal and cost-ecient soluon to address a short-term power shortage. We fully support the ILP and believe it will play a key role in increasing power reserves in the Luzon grid this summer. As part of our program to increase our power generaon capacity by over 2,000 MW over the next
20
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CEO’s Message
ve years, we expect to invest invest P52 billion in 20 15 on various greeneld and browneld projects. Along with the increase in non-renewable non-renewable capacity, we are also vigorously pursuing and growing our renewable energy porolio. This includes solar power through our partnership with US-based SunEdison, Inc., a number of run-of river hydro plants, a potenal pump storage project of SN Aboiz Power, and several geothermal projects across the country. country.
Banking UnionBank’s UnionBank’s income contribuon dropped by 21% year-on-year year-on-year from P4.1 billion in 2013 to P3.2 billion in 2014 due to the exceponally heavy trading gains earned in 2013. On the other hand, neng out the impact of trading gains, the bank actually performed strongly during the year, with net interest income growing by 20% to P10.6 billion in view of the robust expansion in average earning assets.
As we pursue our growth strategy, we look back at how your company has evolved with the power industry that has transformed itself i nto a compeve and market-driven market-driven one, with numerous new entrants to the business. We have built a diversied porolio of power assets with a signicant presence in all three grids from a combinaon of PSALM-privazed assets, acquisions, and greeneld developments in hydro, geothermal, coal, and oil power plants.
Our goal is to build a great retail bank. UnionBank’s greater focus on expanding its retail business, most notably CitySavings’ teacher loan business, will connue to build market share in Luzon and take advantage of emerging opportunies opportunies in the civil servant market segment.
Core to our gentailer (generator-retailer) strategy is Open Access which you oen hear us refer to as the Holy Grail. It is only through Open Access that end-users are given the power of choice; this will truly transform our power industry into a compeve market place. This will also give AboizPower the ability to expand our markets beyond distribuon ulies and the spot market. Open Access gives us the ability to expand our reach to end-users beyond our franchise borders, selling power to contestable customers.
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Over me, we hope to see the threshold of the contestable market market moving from 1 MW to 750 kilowas (kW), then down to 500 kW, kW, and eventually all the way down to households. We have been steadily increasing our sales to contestable customers since Open Access was implemented in June 2013. Building capacity ahead of demand, expanding our networks, Open Access, and our gentailer model will remain at the core of our growth strategy. We are also looking at expansion opportunies in overseas markets where it makes sense from a strategic standpoint, and where we can earn a risk-adjusted rate of return on these investments.
We are also refocusing our eorts to grow our loan book and our other consumer products to adapt to an environment of high liquidity across the industry. Food
Pilmico’s income contribution for 2014 grew by 4% year-on-year to P1.3 billion, propelled by the remarkable performance of our farms whose net income jumped by 101% to P377 million. Despite the influx of cheaper imported flour, our flour volume increased by 2%, while our feeds volume grew by 8%, effectively increasing our market share. The company experienced a landmark year as it ushered the Aboitiz Group’s entry into the ASEAN market. Pilmico acquired a 70% equity stake in Vietnam-based feed mill operator Vinh Hoan 1 Feed JSC (VHF), its first feed mill operations in the country. We will continue to explore opportunities for cross-border trade in the region. We have allocated a total of P2.7 billion to support Pilmico’s efforts to build a new layer farm and expand the capacity of various facilities for its feeds and farms divisions.
Land AboizLand registered a 132% year-on-year year-on-year growth in its income contribuon of P633 million in 2014. The growth was mainly driven by the compleon of its acquision of LiMA Land, higher residenal sales, and increased commercial occupancy levels. The Outlets at Pueblo Verde achieved 100% occupancy within its rst year of operaons.
Marking 20 years of building and nurturing communies, AboizLand’s sales reached new heights as it reached the P3-billion mark, which is 86% higher than last year’s performance. The company is spending P3.7 billion mostly to build its land bank as it connues to aggressively expand on the naonal level and ensure a s ustainable ow of pipeline projects. In 2015, our joint venture with Ayala Land will break ground for the development of a new 15-hectare city center in Mandaue, Cebu that will include innovave residenal, commercial, and oce hubs. Infrastructure As your Chairmen Jon and Endika have menoned, we are adding infrastructure infrastructure and infrastructureinfrastructurerelated businesses as our h business leg. The Philippines needs to raise public infrastructure spending from 2.5% to 5% of GDP to catch up with its ASEAN neighbors. We see huge public and private investment in this sector in the next 10-15 years, and we want to play a signicant role in it.
Despite delays in the bidding and review process of government’s Public-Private Partnership (PPP) projects, and our experience during the CaviteLaguna Expressway project bidding, we remain supporve of these programs. However, we intend to go beyond dependence on PPP alone, and will pursue selecve acquision opportunies and project developments from scratch. We are currently working on the necessary permits for the Davao bulk water project, together with our partner, J.V. Angeles Construcon. This project involves the construcon of a water treatment facility
and conveyance system system that will deliver 300 million liters per day (MLD) of treated bulk water to support Davao City’s growing needs. This is the country’s largest private bulk water supply project to date. We also joined a consorum with Ayala Land, SM Prime Holdings and Megaworld to parcipate in the bidding for the P123-billion Laguna Lakeshore Lakeshore Expressway-Dike Project. Corporate Center As we pursue further growth, we will strengthen the AEV Corporate Center as the knowledge center, governance agent, and business partner of our strategic business units. It will connue to introduce best-in-class knowledge and pracces, take the lead in implemenng Group iniaves, and provide value-added services. The Corporate Center is also responsible for dening policies and standards that will bring everyone across the Group to the same level of excellence.
As Jon and Endika menoned in their message, in 2014 we extensively reviewed reviewed the Group’s Group’s current and future strategy. The review enabled us to conrm that our four strategic pillars are sll very much relevant to the Group’s Group’s future direcon. These pillars are: grow the business, stakeholder stakeholder engagement, execuon execuon excellence, and build human capital. We intend to connue growing AEV but our challenge is not to grow at all costs, but expand in a way where we sll generate returns that are above our cost of capital. We also want to grow while maintaining prudent levels of debt. Without our stakeholders, we cannot accomplish our goals. We need to consistently deliver value to all of them, including our shareholders, our team members, regulators, our customers, and our communies. Delivering value is at the heart of stakeholder engagement. To support our growth, it is imperave that we build human capital. We will connue to keep a deep pool
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CEO’s Message
ve years, we expect to invest invest P52 billion in 20 15 on various greeneld and browneld projects. Along with the increase in non-renewable non-renewable capacity, we are also vigorously pursuing and growing our renewable energy porolio. This includes solar power through our partnership with US-based SunEdison, Inc., a number of run-of river hydro plants, a potenal pump storage project of SN Aboiz Power, and several geothermal projects across the country. country.
Banking UnionBank’s UnionBank’s income contribuon dropped by 21% year-on-year year-on-year from P4.1 billion in 2013 to P3.2 billion in 2014 due to the exceponally heavy trading gains earned in 2013. On the other hand, neng out the impact of trading gains, the bank actually performed strongly during the year, with net interest income growing by 20% to P10.6 billion in view of the robust expansion in average earning assets.
As we pursue our growth strategy, we look back at how your company has evolved with the power industry that has transformed itself i nto a compeve and market-driven market-driven one, with numerous new entrants to the business. We have built a diversied porolio of power assets with a signicant presence in all three grids from a combinaon of PSALM-privazed assets, acquisions, and greeneld developments in hydro, geothermal, coal, and oil power plants.
Our goal is to build a great retail bank. UnionBank’s greater focus on expanding its retail business, most notably CitySavings’ teacher loan business, will connue to build market share in Luzon and take advantage of emerging opportunies opportunies in the civil servant market segment.
Core to our gentailer (generator-retailer) strategy is Open Access which you oen hear us refer to as the Holy Grail. It is only through Open Access that end-users are given the power of choice; this will truly transform our power industry into a compeve market place. This will also give AboizPower the ability to expand our markets beyond distribuon ulies and the spot market. Open Access gives us the ability to expand our reach to end-users beyond our franchise borders, selling power to contestable customers.
. c n I , s e r u t n e V y t i u q E z i t i o b A
Over me, we hope to see the threshold of the contestable market market moving from 1 MW to 750 kilowas (kW), then down to 500 kW, kW, and eventually all the way down to households. We have been steadily increasing our sales to contestable customers since Open Access was implemented in June 2013. Building capacity ahead of demand, expanding our networks, Open Access, and our gentailer model will remain at the core of our growth strategy. We are also looking at expansion opportunies in overseas markets where it makes sense from a strategic standpoint, and where we can earn a risk-adjusted rate of return on these investments.
We are also refocusing our eorts to grow our loan book and our other consumer products to adapt to an environment of high liquidity across the industry. Food
Pilmico’s income contribution for 2014 grew by 4% year-on-year to P1.3 billion, propelled by the remarkable performance of our farms whose net income jumped by 101% to P377 million. Despite the influx of cheaper imported flour, our flour volume increased by 2%, while our feeds volume grew by 8%, effectively increasing our market share. The company experienced a landmark year as it ushered the Aboitiz Group’s entry into the ASEAN market. Pilmico acquired a 70% equity stake in Vietnam-based feed mill operator Vinh Hoan 1 Feed JSC (VHF), its first feed mill operations in the country. We will continue to explore opportunities for cross-border trade in the region. We have allocated a total of P2.7 billion to support Pilmico’s efforts to build a new layer farm and expand the capacity of various facilities for its feeds and farms divisions.
Land AboizLand registered a 132% year-on-year year-on-year growth in its income contribuon of P633 million in 2014. The growth was mainly driven by the compleon of its acquision of LiMA Land, higher residenal sales, and increased commercial occupancy levels. The Outlets at Pueblo Verde achieved 100% occupancy within its rst year of operaons.
Marking 20 years of building and nurturing communies, AboizLand’s sales reached new heights as it reached the P3-billion mark, which is 86% higher than last year’s performance. The company is spending P3.7 billion mostly to build its land bank as it connues to aggressively expand on the naonal level and ensure a s ustainable ow of pipeline projects. In 2015, our joint venture with Ayala Land will break ground for the development of a new 15-hectare city center in Mandaue, Cebu that will include innovave residenal, commercial, and oce hubs. Infrastructure As your Chairmen Jon and Endika have menoned, we are adding infrastructure infrastructure and infrastructureinfrastructurerelated businesses as our h business leg. The Philippines needs to raise public infrastructure spending from 2.5% to 5% of GDP to catch up with its ASEAN neighbors. We see huge public and private investment in this sector in the next 10-15 years, and we want to play a signicant role in it.
Despite delays in the bidding and review process of government’s Public-Private Partnership (PPP) projects, and our experience during the CaviteLaguna Expressway project bidding, we remain supporve of these programs. However, we intend to go beyond dependence on PPP alone, and will pursue selecve acquision opportunies and project developments from scratch. We are currently working on the necessary permits for the Davao bulk water project, together with our partner, J.V. Angeles Construcon. This project involves the construcon of a water treatment facility
and conveyance system system that will deliver 300 million liters per day (MLD) of treated bulk water to support Davao City’s growing needs. This is the country’s largest private bulk water supply project to date. We also joined a consorum with Ayala Land, SM Prime Holdings and Megaworld to parcipate in the bidding for the P123-billion Laguna Lakeshore Lakeshore Expressway-Dike Project. Corporate Center As we pursue further growth, we will strengthen the AEV Corporate Center as the knowledge center, governance agent, and business partner of our strategic business units. It will connue to introduce best-in-class knowledge and pracces, take the lead in implemenng Group iniaves, and provide value-added services. The Corporate Center is also responsible for dening policies and standards that will bring everyone across the Group to the same level of excellence.
As Jon and Endika menoned in their message, in 2014 we extensively reviewed reviewed the Group’s Group’s current and future strategy. The review enabled us to conrm that our four strategic pillars are sll very much relevant to the Group’s Group’s future direcon. These pillars are: grow the business, stakeholder stakeholder engagement, execuon execuon excellence, and build human capital. We intend to connue growing AEV but our challenge is not to grow at all costs, but expand in a way where we sll generate returns that are above our cost of capital. We also want to grow while maintaining prudent levels of debt. Without our stakeholders, we cannot accomplish our goals. We need to consistently deliver value to all of them, including our shareholders, our team members, regulators, our customers, and our communies. Delivering value is at the heart of stakeholder engagement. To support our growth, it is imperave that we build human capital. We will connue to keep a deep pool
22
t r o p e R l a u n n A
4 1 0 2
23
CEO’s Message
AEV CFO’s Message
Mission To create long-term value for all our Stakeholders
Strategic Pillars
Core Values
. c n I , s e r u t n e V y t i u q E z i t i o b A
24
Grow the Business
Integrity
Stakeholder Engagement
|
Teamwork
|
Build Human Capital
Innovaon
|
Execuon Excellence
Responsibility
of best-in-class team members so there are no issues on succession and competency gaps. Achieving this is a joint responsibility of the AEV Corporate Corporate Center and the business units.
success, driven as they are by the Aboiz Passion for Beer Ways. Let us always be guided by our core values of integrity, teamwork, innovaon and responsibility in everything we do.
For us to sharpen our compeve edge, we need to execute best-in-class processes. We will carry on execuon excellence in everything that we do.
To all our shareholders, thank you for your connued trust and condence. We hope you are all as excited as we are about our journey towards realizing our vision to be a truly sustainable enterprise that we can entrust to future generaons. generaons.
Message of Thanks On a personal note, I would like to thank the Board of AEV and AboizPower for their guidance and for entrusng me to connue to lead as your Group CEO unl 2019, which means a three-year deferment deferment of my rerement.
With our strategic plans well laid out, excing mes are certainly ahead of us, and I look forward to leading and working with you through our connuing journey of further further growth. growth. Thank you to all our fellow team members who constantly inspire us with their hard work, commitment, and contribuons to the Group’s
“2015 promises to be an exciting year for AEV as we continue to explore new opportunities for growth, both at home and in the region. The business landscape is evolving on all fronts, and we are gearing up nancially and preparing for these changes.”
Erramon I. Aboiz Chief Execuve Ocer Aboiz Equity Ventures, Inc. Aboiz Power Corporaon
t r o p e R l a u n n A
4 1 0 2
25
CEO’s Message
AEV CFO’s Message
Mission To create long-term value for all our Stakeholders
Strategic Pillars
Core Values
. c n I , s e r u t n e V y t i u q E z i t i o b A
Grow the Business
Integrity
Stakeholder Engagement
|
Teamwork
|
Build Human Capital
Innovaon
|
Execuon Excellence
Responsibility
of best-in-class team members so there are no issues on succession and competency gaps. Achieving this is a joint responsibility of the AEV Corporate Corporate Center and the business units.
success, driven as they are by the Aboiz Passion for Beer Ways. Let us always be guided by our core values of integrity, teamwork, innovaon and responsibility in everything we do.
For us to sharpen our compeve edge, we need to execute best-in-class processes. We will carry on execuon excellence in everything that we do.
To all our shareholders, thank you for your connued trust and condence. We hope you are all as excited as we are about our journey towards realizing our vision to be a truly sustainable enterprise that we can entrust to future generaons. generaons.
Message of Thanks On a personal note, I would like to thank the Board of AEV and AboizPower for their guidance and for entrusng me to connue to lead as your Group CEO unl 2019, which means a three-year deferment deferment of my rerement.
“2015 promises to be an exciting year for AEV as we continue to explore new opportunities for growth, both at home and in the region. The business landscape is evolving on all fronts, and we are gearing up nancially and preparing for these changes.”
With our strategic plans well laid out, excing mes are certainly ahead of us, and I look forward to leading and working with you through our connuing journey of further further growth. growth.
t r o p e R l a u n n A
Erramon I. Aboiz
Thank you to all our fellow team members who constantly inspire us with their hard work, commitment, and contribuons to the Group’s
Chief Execuve Ocer Aboiz Equity Ventures, Inc. Aboiz Power Corporaon
4 1 0 2
24
25
AEV CFO’s Message
In 2014, your company posted a consolidated core net income of P17.9 billion, a 15% dip from the prior year’s gure. Our banking unit posted lower results, as trading gains in 2014 were not as robust as in 2013. Power generaon also saw a drop in its core income due to several factors, including the expiry of the tax incenves granted to Therma Luzon, the weaker performance of SN Aboiz Power, due to low water levels, and the full-year eect of the new steam supply contract in our geothermal power unit. This core income translates to an earnings per share of P3.24, and a Return on Shareholders’ Equity of 20%. Total earnings contribuons from AEV’s strategic business units came from power, power, which accounted for 71%, followed by banking at 18%, food at 7%, and land at 4%. Consolidated EBITDA (Earnings Before Interest, Taxes, Depreciaon, and Amorzaon) rose by 5% yearon-year to P38.4 billion. Benecial EBITDA, a more meaningful metric for us, remained at at P32.7 billion. By the end of the year, cash balances stood at P50.5 billion.
For 2015, we have budgeted about P60 billion in capital expenditures (capex), a signicant increase from the P31 billion in 2014. The bulk of this year’s capex will go to AboizPower’s connuing eorts, together with its partners, to increase total capacity by over 2,000 MW in the next ve years. Meanwhile, our food unit Pilmico is expanding the scale of its feeds and farm divisions, including the recently acquired feeds business in Vietnam. Part of the capex will also be deployed to expand the land bank of AboizLand along with ongoing projects that will grow its land development porolio. Lastly, we aim to connue to grow the branch network of UnionBank and its subsidiary, subsidiary, CitySavings. The domesc economy saw another year of robust growth under a low interest-rate environment, and the Aboiz Group successfully tapped the debt capital markets to fund its own growth iniaves. During 2014, we completed several debt transacons, including the P33-billion project nance loan for
AEV Group Capital Expenditures (in Php billions)*
60 (projected) . c n I , s e r u t n e V y t i u q E z i t i o b A
26
25
25
31
18
2011
2 01 01 2 2 01 01 3 2014 2015
*Includes 100% of subsidiaries and aliates
Pagbilao Energy Corp., and the P10-billion retail peso bond for AboizPower.
It has also helped us reduce risk through the connuing risk surveys performed on our operang assets.
Despite all the addional debt, your company’s balance sheet remains strong, with relavely low gearing. At year-end 2014, net-debt-to-equity net-debt-to-equity stood at only 0.5x, with net-debt-to-EBITDA net-debt-to-EBITDA at 1.5x. AEV’s consolidated debt maturity prole is well within the parameters we have set to migate liquidity and renancing risk over the remaining life of this debt. And with the historically low interest rates currently prevailing, we have deployed a strategy of locking in interest rates on almost all of our term debt, to minimize interest rate risk.
In March 2014, your Board approved a total cash dividend of P1.80 per share, which included a special dividend of P0.53. Total dividends paid amounted to P9.9 billion, or 47% of the previous year’s earnings, earnings, which is well above our 33% minimum dividend payout rao. This translated to a dividend yield at the me of 3%.
We are currently in the advanced stages of closing several project nance packages for our newest greeneld power plant projects, including our 510-MW baseload plant in Toledo City, City, Cebu and our 68-MW Manolo Forch run-of-river hydropower plants in Bukidnon. We expect to close these transacons within the third quarter or earlier. earlier. AEV also intends to tap the retail bond market in the second half to fund various infrastructure-related infrastructure-related businesses. I am grateful grateful to the various domesc and foreign nancial instuons for their valuable support in all these debt transacons.
2015 promises to be an excing year for AEV as we connue to explore new opportunies for growth, both at home and in the region. The business landscape is evolving on all fronts, and we are gearing up nancially and preparing for these changes. We are condent that we will connue to play a meaningful role in the country’s growth story, mindful of our mission to do well by doing good. In closing, I wish to thank our various stakeholders─ our customers, partners, lenders, and suppliers─ for their connued support to the Group. I would also like to thank you, our dear shareholders, for your unwavering condence and trust in your enre management team.
We have also taken steps to further improve the way we manage our risks, with the objecve of achieving the opmal balance between retaining and transferring transferring risk, based on our clear understanding of our risk appete and value at risk. Your company has aggregated the Group’s insurance requirements and has come up with facility programs to further improve the insurance cover for both our operaonal assets and new projects under development. This ini ave has resulted in lower premiums, more clarity on cover, and beer administraon of insurance programs across the Group.
Stephen G. Paradies Senior Vice President Chief Financial Ocer Aboiz Equity Ventures, Inc.
t r o p e R l a u n n A
4 1 0 2
27
AEV CFO’s Message
In 2014, your company posted a consolidated core net income of P17.9 billion, a 15% dip from the prior year’s gure. Our banking unit posted lower results, as trading gains in 2014 were not as robust as in 2013. Power generaon also saw a drop in its core income due to several factors, including the expiry of the tax incenves granted to Therma Luzon, the weaker performance of SN Aboiz Power, due to low water levels, and the full-year eect of the new steam supply contract in our geothermal power unit. This core income translates to an earnings per share of P3.24, and a Return on Shareholders’ Equity of 20%. Total earnings contribuons from AEV’s strategic business units came from power, power, which accounted for 71%, followed by banking at 18%, food at 7%, and land at 4%.
For 2015, we have budgeted about P60 billion in capital expenditures (capex), a signicant increase from the P31 billion in 2014. The bulk of this year’s capex will go to AboizPower’s connuing eorts, together with its partners, to increase total capacity by over 2,000 MW in the next ve years. Meanwhile, our food unit Pilmico is expanding the scale of its feeds and farm divisions, including the recently acquired feeds business in Vietnam. Part of the capex will also be deployed to expand the land bank of AboizLand along with ongoing projects that will grow its land development porolio. Lastly, we aim to connue to grow the branch network of UnionBank and its subsidiary, subsidiary, CitySavings. The domesc economy saw another year of robust growth under a low interest-rate environment, and the Aboiz Group successfully tapped the debt capital markets to fund its own growth iniaves. During 2014, we completed several debt transacons, including the P33-billion project nance loan for
Consolidated EBITDA (Earnings Before Interest, Taxes, Depreciaon, and Amorzaon) rose by 5% yearon-year to P38.4 billion. Benecial EBITDA, a more meaningful metric for us, remained at at P32.7 billion. By the end of the year, cash balances stood at P50.5 billion.
60 (projected)
25
25
Despite all the addional debt, your company’s balance sheet remains strong, with relavely low gearing. At year-end 2014, net-debt-to-equity net-debt-to-equity stood at only 0.5x, with net-debt-to-EBITDA net-debt-to-EBITDA at 1.5x. AEV’s consolidated debt maturity prole is well within the parameters we have set to migate liquidity and renancing risk over the remaining life of this debt. And with the historically low interest rates currently prevailing, we have deployed a strategy of locking in interest rates on almost all of our term debt, to minimize interest rate risk.
In March 2014, your Board approved a total cash dividend of P1.80 per share, which included a special dividend of P0.53. Total dividends paid amounted to P9.9 billion, or 47% of the previous year’s earnings, earnings, which is well above our 33% minimum dividend payout rao. This translated to a dividend yield at the me of 3%.
We are currently in the advanced stages of closing several project nance packages for our newest greeneld power plant projects, including our 510-MW baseload plant in Toledo City, City, Cebu and our 68-MW Manolo Forch run-of-river hydropower plants in Bukidnon. We expect to close these transacons within the third quarter or earlier. earlier. AEV also intends to tap the retail bond market in the second half to fund various infrastructure-related infrastructure-related businesses. I am grateful grateful to the various domesc and foreign nancial instuons for their valuable support in all these debt transacons.
Your company has aggregated the Group’s insurance requirements and has come up with facility programs to further improve the insurance cover for both our operaonal assets and new projects under development. This ini ave has resulted in lower premiums, more clarity on cover, and beer administraon of insurance programs across the Group.
31
18
2011
It has also helped us reduce risk through the connuing risk surveys performed on our operang assets.
2015 promises to be an excing year for AEV as we connue to explore new opportunies for growth, both at home and in the region. The business landscape is evolving on all fronts, and we are gearing up nancially and preparing for these changes. We are condent that we will connue to play a meaningful role in the country’s growth story, mindful of our mission to do well by doing good. In closing, I wish to thank our various stakeholders─ our customers, partners, lenders, and suppliers─ for their connued support to the Group. I would also like to thank you, our dear shareholders, for your unwavering condence and trust in your enre management team.
We have also taken steps to further improve the way we manage our risks, with the objecve of achieving the opmal balance between retaining and transferring transferring risk, based on our clear understanding of our risk appete and value at risk.
AEV Group Capital Expenditures (in Php billions)*
. c n I , s e r u t n e V y t i u q E z i t i o b A
Pagbilao Energy Corp., and the P10-billion retail peso bond for AboizPower.
Stephen G. Paradies Senior Vice President Chief Financial Ocer Aboiz Equity Ventures, Inc.
t r o p e R l a u n n A
4 1 0 2
2 01 01 2 2 01 01 3 2014 2015
*Includes 100% of subsidiaries and aliates
26
27
AboitizPower CFO’s Message
Shareholder Value Earnings and Dividends (in Php billions)
23.96 21.24
21.03
Earnings
18.38
Dividends
11.04 8.73
8.73
2011
2012
9.94
*Amounts paid in succeeding year
2014
2013
Dividend Per Share (DPS) and Dividend Yield*
“Armed with a strong balance sheet and healthy cash ows, we are more than prepared to continue expanding our portfolio by investing in greeneld and browneld projects nationwide to keep pace with the country’s economic progress.”
2.00 1.80 1.58
Dividend per Share (in pesos/share)
1.11 3.3%
3.4%
Dividend Yield* *Yields are computed by dividing DPS by the closing price of declaraon date
3.0% 1.9%
2012
Share Price . c n I , s e r u t n e V y t i u q E z i t i o b A
28
2013
2014
2015
Total Return to Shareholder (TRS)*
(Peso/Share)
Year
Hi gh
L ow
2014
61.50
48.90
2013
60.30
40.00
2012
54.80
40.20
0% 46% (1 year)
Share Price Performance Year
20 14 (%)
YTD March 3 1, 2015 (%)
AEV
-3%
10%
PSEi
23 %
10%
(5 year)
* TRS is computed by combining share price appreciaon and dividends paid to show TRS expressed as a compounded annual growth rate (CAGR)
t r o p e R l a u n n A
4 1 0 2
29
AboitizPower CFO’s Message
Shareholder Value Earnings and Dividends (in Php billions)
23.96 21.24
21.03
Earnings
18.38
“Armed with a strong balance sheet and healthy cash ows, we are more than prepared to continue expanding our portfolio by investing in greeneld and browneld projects nationwide to keep pace with the country’s economic progress.”
Dividends
11.04
9.94
8.73
8.73
2011
2012
*Amounts paid in succeeding year
2014
2013
Dividend Per Share (DPS) and Dividend Yield*
2.00 1.80 1.58
Dividend per Share (in pesos/share)
1.11 3.3%
3.4%
Dividend Yield* *Yields are computed by dividing DPS by the closing price of declaraon date
3.0% 1.9%
2012
Share Price . c n I , s e r u t n e V y t i u q E z i t i o b A
2014
2013
2015
Total Return to Shareholder (TRS)*
(Peso/Share)
Year
Hi gh
L ow
2014
61.50
48.90
2013
60.30
40.00
2012
54.80
40.20
0% 46% (1 year)
Share Price Performance Year
20 14 (%)
YTD March 3 1, 2015 (%)
AEV
-3%
10%
PSEi
23 %
10%
t r o p e R l a u n n A
(5 year)
* TRS is computed by combining share price appreciaon and dividends paid to show TRS expressed as a compounded annual growth rate (CAGR)
4 1 0 2
28
29
AboitizPower CFO’s Message
For 2014, AboizPower’s core net income decreased by 16% to P16.8 billion from P20.1 billion in 2013, even as revenues grew by 9% from P92.6 billion in 2013 to P100.9 billion on the back of stronger sales.
In line with our thrust to transform AboizPower into one of the country’s largest generator-retailers, we were able to contract 14% of our net sellable capacity of 2,250 MW with contestable customers amounng to 311 MW. We expect to further grow this share in The decline in the company’s boom line is aributed the coming years. Through these iniaves, we are mostly to the expiraon of the tax holidays some of able to minimize our risk and realize the benets of a our plants had enjoyed in previous years, the impact more stable and predictable cash ow environment. of the higher fuel cost brought on by the full-year implementaon of the Geothermal Resource Sales However, due to the aforemenoned factors, the Contract (GRSC) for the Tiwi-MakBan geothermal Generaon Group ended 2014 with a net income of facilies, as well as the unusually dry spell that P13.5 billion versus the previous year’s P15.2 billion. adversely impacted several of our hydropower plants, especially Magat. Our distribuon business saw its distributed volume expand by 10% to 4,480 GWh from 4,076 GWh in the In 2014, our generaon business registered a 13% previous year. However, net income at year-end 2014 year-on-year increase in capacity sales due to robust remained at at P3.2 billion. Gross margins on a per demand. During the year, we were able to contract kWh basis decreased from P1.77 to P1.71 because close to 90% of our capacity, even as we tried to we needed to operate our embedded plants to meet further diversify our customer base. the shorall in the Mindanao grid. Strong demand
Bulk of the offtake agreements now under capacity-based contracts Year-End 2012
n o i t a r o p r o C r e w o P z i t i o b A
30
With O-taker Generaon Based 1,305 MW With O-taker Capacity Based 381 MW Without O-taker 605 MW
With O-taker Generaon Based 253 MW
26%
17%
Year-End 2014
57%
With O-taker Capacity Based 1,682 MW Without O-taker 273 MW
growth from our lower-margin industrial customers also contributed to the decline in margins.
maintain a balance between strong dividend payments and funding growth.
To help us gear up for our growth iniaves, AboizPower tapped the bond market for its capital expenditures (capex) last year, raising P10 billion from the issuance of our xed-rate retail bonds, which earned the highest possible score from PhilRangs for their strength as a debt instrument. We also closed a new loan amounng to P33 billion to support our Pagbilao expansion project. I am pleased to note that for both these deals, we were able to secure terms that reect the risk prole and long-term nature of our investments.
In April 2014, we were able to pay out a total of P12.2 billion in cash dividends, or 66% of the previous year’s earnings, with a yield of 4.0%.
For 2015, AboizPower together with its partners have earmarked about P52 billion for capex as part of the company’s ongoing eorts to boost total capacity by around 2,000 MW over the next ve years. These investments will be tapping the right mix of energy sources that aim to balance the interests of people, planet, and prot. We recognize that demand for power will connue to grow as the economy expands, and we are prepared to do our share.
Armed with a strong balance sheet and healthy cash ows, we are more than prepared to connue expanding our porolio by invesng in greeneld and browneld projects naonwide to keep pace with the country’s economic progress. Aer all, we consider it our responsibility to provide reliable, ample, and reasonably priced power. It is our way of doing well by doing good. I will do my best as your CFO to work closely with our stakeholders to realize this.
Despite many challenges, AboizPower has remained commied to deliver value to its stakeholders. Market capitalizaon is now at P315.7 billion, an increase of 26% from P250.2 billion in 2013. Combining this with our historically aracve dividend yield, total return to shareholders registered at a compounded annual growth rate of 42% over the past ve years.
To bankroll these growth plans, we expect to draw Thank you very much for your connued support, down more debt in 2015. At present, your nance trust, and condence in AboizPower. team is already engaged in talks with lenders for innovave debt structures designed to prolong tenors and manage more eciently our capital infusion, which will help enhance equity returns. This is possible because as a company, we have maintained a strong balance sheet over the years, with a current consolidated net debt-to-equity rao of 0.6x from 0.5x a year before.
12% 12% 76%
Our borrowing strategy is a key component of our ability to maximize returns and eecvely manage our debt maturity prole. For 2014, our Return on Equity was 21%, which is admirable considering the prevailing low-interest rate environment we are experiencing. Addionally, this has allowed us to
Manuel R. Lozano First Vice President Chief Financial Ocer Aboiz Power Corporaon
t r o p e R l a u n n A
4 1 0 2
31
AboitizPower CFO’s Message
For 2014, AboizPower’s core net income decreased by 16% to P16.8 billion from P20.1 billion in 2013, even as revenues grew by 9% from P92.6 billion in 2013 to P100.9 billion on the back of stronger sales.
In line with our thrust to transform AboizPower into one of the country’s largest generator-retailers, we were able to contract 14% of our net sellable capacity of 2,250 MW with contestable customers amounng to 311 MW. We expect to further grow this share in The decline in the company’s boom line is aributed the coming years. Through these iniaves, we are mostly to the expiraon of the tax holidays some of able to minimize our risk and realize the benets of a our plants had enjoyed in previous years, the impact more stable and predictable cash ow environment. of the higher fuel cost brought on by the full-year implementaon of the Geothermal Resource Sales However, due to the aforemenoned factors, the Contract (GRSC) for the Tiwi-MakBan geothermal Generaon Group ended 2014 with a net income of facilies, as well as the unusually dry spell that P13.5 billion versus the previous year’s P15.2 billion. adversely impacted several of our hydropower plants, especially Magat. Our distribuon business saw its distributed volume expand by 10% to 4,480 GWh from 4,076 GWh in the In 2014, our generaon business registered a 13% previous year. However, net income at year-end 2014 year-on-year increase in capacity sales due to robust remained at at P3.2 billion. Gross margins on a per demand. During the year, we were able to contract kWh basis decreased from P1.77 to P1.71 because close to 90% of our capacity, even as we tried to we needed to operate our embedded plants to meet further diversify our customer base. the shorall in the Mindanao grid. Strong demand
Bulk of the offtake agreements now under capacity-based contracts Year-End 2012
n o i t a r o p r o C r e w o P z i t i o b A
With O-taker Generaon Based 1,305 MW
Year-End 2014 With O-taker Generaon Based 253 MW
26%
With O-taker Capacity Based 381 MW Without O-taker 605 MW
12% 76%
Without O-taker 273 MW
In April 2014, we were able to pay out a total of P12.2 billion in cash dividends, or 66% of the previous year’s earnings, with a yield of 4.0%.
For 2015, AboizPower together with its partners have earmarked about P52 billion for capex as part of the company’s ongoing eorts to boost total capacity by around 2,000 MW over the next ve years. These investments will be tapping the right mix of energy sources that aim to balance the interests of people, planet, and prot. We recognize that demand for power will connue to grow as the economy expands, and we are prepared to do our share.
Armed with a strong balance sheet and healthy cash ows, we are more than prepared to connue expanding our porolio by invesng in greeneld and browneld projects naonwide to keep pace with the country’s economic progress. Aer all, we consider it our responsibility to provide reliable, ample, and reasonably priced power. It is our way of doing well by doing good. I will do my best as your CFO to work closely with our stakeholders to realize this.
Despite many challenges, AboizPower has remained commied to deliver value to its stakeholders. Market capitalizaon is now at P315.7 billion, an increase of 26% from P250.2 billion in 2013. Combining this with our historically aracve dividend yield, total return to shareholders registered at a compounded annual growth rate of 42% over the past ve years.
To bankroll these growth plans, we expect to draw Thank you very much for your connued support, down more debt in 2015. At present, your nance trust, and condence in AboizPower. team is already engaged in talks with lenders for innovave debt structures designed to prolong tenors and manage more eciently our capital infusion, which will help enhance equity returns. This is possible because as a company, we have maintained a strong balance sheet over the years, with a current consolidated net debt-to-equity rao of 0.6x from 0.5x a year before. Our borrowing strategy is a key component of our ability to maximize returns and eecvely manage our debt maturity prole. For 2014, our Return on Equity was 21%, which is admirable considering the prevailing low-interest rate environment we are experiencing. Addionally, this has allowed us to
Manuel R. Lozano First Vice President Chief Financial Ocer Aboiz Power Corporaon
t r o p e R l a u n n A
31
Shareholder Value Earnings and Dividends (in Php billions)
24.43 21.63 Earnings
18.58 11.33
9.71
2011
2012
16.71
12.22
12.22
Dividends *Amounts paid in succeeding year
2014
2013
Dividend Per Share (DPS) and Dividend Yield*
1.66
1.54
1.66**
1.66
Dividend per Share (in pesos/share) Dividend Yield*
4.3%
4.1%
4.0% 3.7%
2012
2013
Share Price (Peso/Share)
32
To help us gear up for our growth iniaves, AboizPower tapped the bond market for its capital expenditures (capex) last year, raising P10 billion from the issuance of our xed-rate retail bonds, which earned the highest possible score from PhilRangs for their strength as a debt instrument. We also closed a new loan amounng to P33 billion to support our Pagbilao expansion project. I am pleased to note that for both these deals, we were able to secure terms that reect the risk prole and long-term nature of our investments.
4 1 0 2
30
n o i t a r o p r o C r e w o P z i t i o b A
maintain a balance between strong dividend payments and funding growth.
12%
With O-taker Capacity Based 1,682 MW
57%
17%
growth from our lower-margin industrial customers also contributed to the decline in margins.
2014
Year
Hi gh
L ow
42.90
33.90
2013
39.95
31.00
2012
37.50
28.75
2015
30% 42% (1 year)
Share Price Performance 2 014 (%)
**Composed of P1.14/ share (regular) and P0.52/ share (special)
Total Return to Shareholder
2014
Year
*Yields are computed by dividing DPS by the closing price of declaraon date
YTD Marc h 31, 201 5 (%)
AboizPower
26%
4%
PSEi
2 3%
10 %
(5 year)
*TRS is computed by combining share price appreciaon and dividends paid to show TRS expressed as a compounded annual growth rate (CAGR).
Shareholder Value Earnings and Dividends (in Php billions)
24.43 21.63 Earnings
18.58 12.22
11.33
9.71
2011
16.71
2012
12.22
Dividends *Amounts paid in succeeding year
2014
2013
Dividend Per Share (DPS) and Dividend Yield*
1.66
1.54
1.66**
1.66
Dividend per Share (in pesos/share) Dividend Yield*
4.3%
4.1%
4.0% 3.7%
2012
2014
2013
Share Price (Peso/Share) n o i t a r o p r o C r e w o P z i t i o b A
Hi gh
L ow
2014
42.90
33.90
2013
39.95
31.00
2012
37.50
28.75
2015
30% 42% (1 year)
Share Price Performance 2 014 (%)
**Composed of P1.14/ share (regular) and P0.52/ share (special)
Total Return to Shareholder
Year
Year
*Yields are computed by dividing DPS by the closing price of declaraon date
YTD Marc h 31, 201 5 (%)
AboizPower
26%
4%
PSEi
2 3%
10 %
(5 year)
*TRS is computed by combining share price appreciaon and dividends paid to show TRS expressed as a compounded annual growth rate (CAGR).
32
Power Generaon
AboizPower currently generates electricity from coal, geothermal, oil, and hydro power, and recently forged a partnership to develop its solar energy capability.
How Power is Provided
Power Distribuon
AboizPower delivers electricity through its distribuon ulies VECO, Davao Light, Cotabato Light, SFELAPCO, Subic EnerZone, Mactan EnerZone, Balamban EnerZone and LiMA EnerZone.
AboizPower’s strategy is to provide the ri ght mix of energy sources that supplies the naon with reliable and ample power supply at a reasonable cost, and produced with the l east impact on the environment and its host communies.
Retail Electricity Supplier (RES) AboizPower supplies electricity directly to large-scale users through AESI and AdventEnergy,, the official retail electricity AdventEnergy suppliers of AboizPower. They empower customers to choose their own sources of energy and rate structure.
RES
1
3
5
2 4 6
1
2
5
6
Power Generaon
Transmission
Power Distribuon
3
4 Retail Electricity Supplier (RES)
Customers
Contestable Customers
Power plants across the country produce energy from various energy sources.
The energy produced by the power plants pass through transmission lines to reach the power distribuon network.
Distribuon ulies and electric cooperaves deliver power to their customers.
A RES is an enty authorized by the Energy Regulatory Commission to sell, broker, or market electricity directly to large-scale users.
Industrial, business, and residenal customers get their electricity from distribuon ulies and electric cooperaves.
Some customers who consume an average demand of 1 MW and above contract their power requirements directly from the RES in order to have more flexibility in choosing their preferred energy sources, rate structure, and supplier.
Power Generaon
AboizPower currently generates electricity from coal, geothermal, oil, and hydro power, and recently forged a partnership to develop its solar energy capability.
How Power is Provided
Power Distribuon
AboizPower delivers electricity through its distribuon ulies VECO, Davao Light, Cotabato Light, SFELAPCO, Subic EnerZone, Mactan EnerZone, Balamban EnerZone and LiMA EnerZone.
AboizPower’s strategy is to provide the ri ght mix of energy sources that supplies the naon with reliable and ample power supply at a reasonable cost, and produced with the l east impact on the environment and its host communies.
Retail Electricity Supplier (RES) AboizPower supplies electricity directly to large-scale users through AESI and AdventEnergy,, the official retail electricity AdventEnergy suppliers of AboizPower. They empower customers to choose their own sources of energy and rate structure.
RES
1
3
5
2 4 6
1
2
5
6
Power Generaon
Transmission
Power Distribuon
3
4 Retail Electricity Supplier (RES)
Customers
Contestable Customers
Power plants across the country produce energy from various energy sources.
The energy produced by the power plants pass through transmission lines to reach the power distribuon network.
Distribuon ulies and electric cooperaves deliver power to their customers.
A RES is an enty authorized by the Energy Regulatory Commission to sell, broker, or market electricity directly to large-scale users.
Industrial, business, and residenal customers get their electricity from distribuon ulies and electric cooperaves.
Some customers who consume an average demand of 1 MW and above contract their power requirements directly from the RES in order to have more flexibility in choosing their preferred energy sources, rate structure, and supplier.
Business Review: Power
“We see ourselves as an integral partner in nation-building, which is why we are consistently increasing our capacity and exploring new sources of energy. In ve years we should have increased capacity by more than 2,000 MW, providing the right mix of renewable and non-renewable energy sources that sufciently meet the economy’s increasing energy demands, with the least impact on the environment and our host communities. We are also looking at ways to constantly innovate and modernize services. Our vision is to operate an electric distribution network that optimizes the latest technology to improve reliability, resiliency, exibility, and efciency in the delivery of electric service to our customers.
The Tudaya 2 hydropower plant generates 7 MW of clean renewable energy for the Davao del Sur Electric Cooperave that delivers power to the Mindanao grid.
Results of Operations AboizPower recorded recorded a consolidated net income of P16.7 billion in 2014, a 10% decline from P18.6 billion in 2013. This translated to an earnings per share of P2.27 compared to P2.52 in 2013. Core net income for 2014 amounted to P16.8 billion, down by 16% from the previous year. (in Php millions)
Consolidated
Beyond our shores, AboitizPower is exploring investment opportunities in Asia.” n o i t a r o p r o C r e w o P z i t i o b A
36
20 12
20 13
2014
Revenues
62,153
72,055
86,759
EBITDA
34,242
29,900
31,765
6%
Net Income
24,426
18,577
16,705
-10%
Core Net Income
23,702
20,124
16,841
-16%
Benecial
20 12
201 3
2014
Revenues
90,639
92,624
100,948
9%
EBITDA
36,530
33,025
32,615
-1%
Antonio R. Moraza President and COO
% change (2014 vs. 2013)
20%
% change (2014 vs. 2013)
t r o p e R l a u n n A
4 1 0 2
37
Business Review: Power
“We see ourselves as an integral partner in nation-building, which is why we are consistently increasing our capacity and exploring new sources of energy. In ve years we should have increased capacity by more than 2,000 MW, providing the right mix of renewable and non-renewable energy sources that sufciently meet the economy’s increasing energy demands, with the least impact on the environment and our host communities. We are also looking at ways to constantly innovate and modernize services. Our vision is to operate an electric distribution network that optimizes the latest technology to improve reliability, resiliency, exibility, and efciency in the delivery of electric service to our customers.
The Tudaya 2 hydropower plant generates 7 MW of clean renewable energy for the Davao del Sur Electric Cooperave that delivers power to the Mindanao grid.
Results of Operations AboizPower recorded recorded a consolidated net income of P16.7 billion in 2014, a 10% decline from P18.6 billion in 2013. This translated to an earnings per share of P2.27 compared to P2.52 in 2013. Core net income for 2014 amounted to P16.8 billion, down by 16% from the previous year. (in Php millions)
Consolidated
Beyond our shores, AboitizPower is exploring investment opportunities in Asia.” n o i t a r o p r o C r e w o P z i t i o b A
20 12
20 13
2014
% change (2014 vs. 2013)
Revenues
62,153
72,055
86,759
EBITDA
34,242
29,900
31,765
6%
Net Income
24,426
18,577
16,705
-10%
Core Net Income
23,702
20,124
16,841
-16%
Benecial
20 12
201 3
2014
Revenues
90,639
92,624
100,948
9%
EBITDA
36,530
33,025
32,615
-1%
Antonio R. Moraza President and COO
20%
% change (2014 vs. 2013)
36
t r o p e R l a u n n A
4 1 0 2
37
Business Review: Power Power Generation
Large Hydro
The Generaon Group accounted for 81% of earnings contribuons from AboizPower’s business segments, recording an income share of P13.5 billion in 2014, down by 11% from P15.2 billion in 2013. The decline is aributed to the full-year impact of the implementaon of the Geothermal Resource Sales Contract (GRSC) of the Tiwi-MakBan plants, the limited operaons of the Magat plant due to low water levels, and the expiraon of the Pagbilao and Magat plants’ income tax holiday during the year. The large hydropower plants were also adversely impacted by lower average prices for both spot and ancillary sales. The Group’s revenues went down by 1% to P58.4 billion. The aributable net generaon rose by 3% from 10,949 gigawa hours (GWh) to 11,272 GWh, as electricity sold through bilateral contracts, which made up 86% of total energy sold during the period, expanded by 7% to 9,661 GWh. On the other hand, spot market sales decreased by 16% from 1,914 GWh to 1,612 GWh as low water levels during the dry season constrained the operaons of the Magat, Ambuklao, and Binga plants. Higher capacity sales in 2014 through bilateral contracts and ancillary services resulted to a 13% increase in AboizPower’s aributable sales to 1,800 megawas (MW). The growth was driven by the 200MW full capacity operaons of Therma Mobile, Inc. in the second quarter of 2014, and the increase in
water levels in the second half of 2014 for the large hydropower plants.
Geothermal Aributable energy sold from the Tiwi and MakBan geothermal plants of AP Renewables, Inc. (APRI) amounted to 2,772 GWh, a 4% decrease from the previous year due to the post-eects of typhoon Glenda, aecng the capability of the steam elds during the second half of the year. This translated to P12.4 bill ion in revenues, down by 11% from the previous year, and a capacity sold factor of 79% for 2014. On the other hand, fuel costs have increased yearon-year by 20%, with the full-year implementaon of the GRSC and the interim agreement between APRI and Philippine Geothermal Producon Company, Inc. (PGPC). In December 2014, Aboiz Energy Soluons, Inc. (AESI) successfully secured a 40-MW supply from the Unied Leyte Geothermal Power Plant (ULGPP) complex as an Independent Power Producer (IPP) administrator aer the Power Sector Assets and Liabilies Management Corporaon (PSALM) (PSALM) bid out strips of the power plant’s capacity to various IPP administrators. administrators.
Aributable volume sold from the large hydropower plants of SN Aboiz Power (SNAP) increased by 5% to 1,652 GWh as a result of higher ancillary sales, owing to the full-year eect of the rm volumes sold to the Naonal Grid Corporaon of the Philippines (NGCP), based on its provisional Ancillary Services Provider Agreement (ASPA), which took eect in August 2013. Year-on-year revenues dropped by 32% to P6.2 billion, as prices from the spot market normalized from its high levels during the November to December 2013 price hike. In 2014, SNAP-Magat SNAP-Magat completed the rehabilitaon of the 360-MW Magat plant aer undergoing half-life refurbishment of the facility’s electro-mechanical equipment. With its three large plants now operang at a more ecient level, SNAP is now powering the Luzon grid with nearly brand-new hydropower plants. Meanwhile, SNAP-Magat and Naonal Irrigaon Administraon (NIA) have signed a Memorandum of Understanding for SNAP to develop the proposed 6-MW Maris South Canal and 1.75-MW Maris North Canal minihydropower projects. This was aer SNAP-Greeneld secured renewable energy service contracts (RESCs) from the DOE for the two projects in December 2013. SNAP-Greeneld is currently waing for DOE’s approval of the assignment of the RESCs to SNAP-Magat.
Moreover, SNAP-Ifugao has also secured RESCs for its proposed 350-MW hydropower complex project in Ifugao, which is composed of three facilies: the 100MW Alimit and 10-MW Olilicon plants, and the 240-MW Alimit pumped storage facility. Both the Maris and Alimit projects are currently in the feasibility study stage. In late 2014, SNAP-Magat and NIA held a ground-breaking ceremony for the opmizaon of the Maris Reservoir. This project aims to increase the reservoir’s storage by 8 million cubic meters and improve its structure for beer irrigaon water delivery and safety by the rst quarter of 2016.
Run-of-River Hydro Aributable energy sold from Hedcor’s run-of-river plants rose by 9% to 690 GWh year-on-year, brought on by the addion of the fully-contracted fully-contracted Tudaya plant in Davao, which came on-stream in 2014. Capacity sold factor in 2014 was at 51%, and total revenues amounted to P3.1 billion, up by 10% from the previous year. In its bid to improve operaonal eciency, Hedcor updated and automated some of its plants and substaons in Benguet. 2014 was another banner year for the company with the compleon of its 13.7-MW Tudaya plants in Davao del Sur, which are now online to serve Davao Light and Power Company, and Davao del Sur Electric Cooperave. Cooperave.
Growing its geothermal power supply porolio, through the exploraon of potenal steam wells in Negron Cuadrado and Mt. Apo, remains one of AboizPower’s AboizPower’s goals for 2015.
(in Php millions)
n o i t a r o p r o C r e w o P z i t i o b A
Power Generaon (Benecial)
201 2
20 13
2014
Revenues
62,539
58,836
58,409
-1%
EBITDA
32 , 121
27,999
27,041
-3%
Income Contribuon
22,760
15,226
13,476
-11%
% change (2014 vs. 2013) t r o p e R l a u n n A
AP Renewables, Inc.’s Tiwi geothermal facility in Albay is a key source of clean and renewable geothermal energy in the country.
38
4 1 0 2
39
Business Review: Power Power Generation
Moreover, SNAP-Ifugao has also secured RESCs for its proposed 350-MW hydropower complex project in Ifugao, which is composed of three facilies: the 100MW Alimit and 10-MW Olilicon plants, and the 240-MW Alimit pumped storage facility. Both the Maris and Alimit projects are currently in the feasibility study stage.
Large Hydro
The Generaon Group accounted for 81% of earnings contribuons from AboizPower’s business segments, recording an income share of P13.5 billion in 2014, down by 11% from P15.2 billion in 2013. The decline is aributed to the full-year impact of the implementaon of the Geothermal Resource Sales Contract (GRSC) of the Tiwi-MakBan plants, the limited operaons of the Magat plant due to low water levels, and the expiraon of the Pagbilao and Magat plants’ income tax holiday during the year. The large hydropower plants were also adversely impacted by lower average prices for both spot and ancillary sales. The Group’s revenues went down by 1% to P58.4 billion. The aributable net generaon rose by 3% from 10,949 gigawa hours (GWh) to 11,272 GWh, as electricity sold through bilateral contracts, which made up 86% of total energy sold during the period, expanded by 7% to 9,661 GWh. On the other hand, spot market sales decreased by 16% from 1,914 GWh to 1,612 GWh as low water levels during the dry season constrained the operaons of the Magat, Ambuklao, and Binga plants. Higher capacity sales in 2014 through bilateral contracts and ancillary services resulted to a 13% increase in AboizPower’s aributable sales to 1,800 megawas (MW). The growth was driven by the 200MW full capacity operaons of Therma Mobile, Inc. in the second quarter of 2014, and the increase in
water levels in the second half of 2014 for the large hydropower plants.
Geothermal Aributable energy sold from the Tiwi and MakBan geothermal plants of AP Renewables, Inc. (APRI) amounted to 2,772 GWh, a 4% decrease from the previous year due to the post-eects of typhoon Glenda, aecng the capability of the steam elds during the second half of the year. This translated to P12.4 bill ion in revenues, down by 11% from the previous year, and a capacity sold factor of 79% for 2014. On the other hand, fuel costs have increased yearon-year by 20%, with the full-year implementaon of the GRSC and the interim agreement between APRI and Philippine Geothermal Producon Company, Inc. (PGPC). In December 2014, Aboiz Energy Soluons, Inc. (AESI) successfully secured a 40-MW supply from the Unied Leyte Geothermal Power Plant (ULGPP) complex as an Independent Power Producer (IPP) administrator aer the Power Sector Assets and Liabilies Management Corporaon (PSALM) (PSALM) bid out strips of the power plant’s capacity to various IPP administrators. administrators.
Aributable volume sold from the large hydropower plants of SN Aboiz Power (SNAP) increased by 5% to 1,652 GWh as a result of higher ancillary sales, owing to the full-year eect of the rm volumes sold to the Naonal Grid Corporaon of the Philippines (NGCP), based on its provisional Ancillary Services Provider Agreement (ASPA), which took eect in August 2013. Year-on-year revenues dropped by 32% to P6.2 billion, as prices from the spot market normalized from its high levels during the November to December 2013 price hike.
In late 2014, SNAP-Magat and NIA held a ground-breaking ceremony for the opmizaon of the Maris Reservoir. This project aims to increase the reservoir’s storage by 8 million cubic meters and improve its structure for beer irrigaon water delivery and safety by the rst quarter of 2016.
In 2014, SNAP-Magat SNAP-Magat completed the rehabilitaon of the 360-MW Magat plant aer undergoing half-life refurbishment of the facility’s electro-mechanical equipment. With its three large plants now operang at a more ecient level, SNAP is now powering the Luzon grid with nearly brand-new hydropower plants. Meanwhile, SNAP-Magat and Naonal Irrigaon Administraon (NIA) have signed a Memorandum of Understanding for SNAP to develop the proposed 6-MW Maris South Canal and 1.75-MW Maris North Canal minihydropower projects. This was aer SNAP-Greeneld secured renewable energy service contracts (RESCs) from the DOE for the two projects in December 2013. SNAP-Greeneld is currently waing for DOE’s approval of the assignment of the RESCs to SNAP-Magat.
Run-of-River Hydro Aributable energy sold from Hedcor’s run-of-river plants rose by 9% to 690 GWh year-on-year, brought on by the addion of the fully-contracted fully-contracted Tudaya plant in Davao, which came on-stream in 2014. Capacity sold factor in 2014 was at 51%, and total revenues amounted to P3.1 billion, up by 10% from the previous year. In its bid to improve operaonal eciency, Hedcor updated and automated some of its plants and substaons in Benguet. 2014 was another banner year for the company with the compleon of its 13.7-MW Tudaya plants in Davao del Sur, which are now online to serve Davao Light and Power Company, and Davao del Sur Electric Cooperave. Cooperave.
Growing its geothermal power supply porolio, through the exploraon of potenal steam wells in Negron Cuadrado and Mt. Apo, remains one of AboizPower’s AboizPower’s goals for 2015.
(in Php millions)
n o i t a r o p r o C r e w o P z i t i o b A
Power Generaon (Benecial)
201 2
20 13
2014
Revenues
62,539
58,836
58,409
-1%
EBITDA
32 , 121
27,999
27,041
-3%
Income Contribuon
22,760
15,226
13,476
-11%
% change (2014 vs. 2013) t r o p e R l a u n n A
AP Renewables, Inc.’s Tiwi geothermal facility in Albay is a key source of clean and renewable geothermal energy in the country.
38
4 1 0 2
39
Business Review: Power Generaon Companies Overview AboizPower’s AboizPower’s porolio of generaon assets accounts for 15% of the country’s installed generaon capacity
By the second quarter of 2015, Hedcor expects to complete the 14-MW Sabangan project, the company’s rst plant in Mountain Province. Construcon of the 68MW Manolo Forch plant in Bukidnon is also underway as compliance requirements for the project have already been secured.
Coal Aributable energy sold from AboizPower’s AboizPower’s coal power plants amounted to 5,511 GWh, slightly up by 2% from 2013. However, revenues from coal plants were lower by 1% to P23.7 billion, mainly driven by forced outages experienced by STEAG State Power, Inc. during the rst half of the year and Therma Luzon, Inc. (TLI) during the onset of typhoon Glenda. Capacity sold factor sll rose to 93%, up by 3% year-on-year as a result of the full-year eect of TLI’s ASPA with NGCP for 2014. With demand for power expected to rise in the coming years, AboizPower aims to provide reliable power through its various baseload plants. Hence, the company launched the 420-MW Pagbilao III circulang uidized bed (CFB) coal-red plant of Pagbilao Energy Corporaon, Corporaon, a consorum of AboizPower and TeaM Energy Corporaon. Corporaon. Compleon is expected in 2017. Meanwhile, the 300-MW CFB coal-red plant of Therma South, Inc. (TSI) in Davao will be online within 2015 and will provide much-needed power to the Mindanao grid.
Meanwhile, the 340-MW Therma Visayas baseload plant in Cebu will likewise commence construcon in 2015, and the 600-MW Subic plant is expected to resume construcon aer hurdling legal challenges.
Aributable Net Sellable Capacity by Type
Oil The Oil Group performed well in 2014 with an aributable energy sold of 1,504 GWh, 25% higher from 2013. Capacity sold factor also went up to 95%, which translates to revenues of P12.9 billion, 46% higher than the previous year. The strong growth in revenues largely came from the full operaons of Therma Mobile, Inc. (TMO) in 2014 and its increase in capacity by another 100 MW aer the rehabilitaon of its Navotas barges. TMO will connue to supply a total of 200 MW of capacity to its sole customer Meralco in 2015.
Hydro 463 MW Renewable 893 MW
Meanwhile, Therma Marine’s power barges M1 and M2 were ulized at near-baseload levels in 2014 due to the connuous power supply shortages in Mindanao region.
Geothermal 430 MW
Overall, the Generaon Group is on target in its capacity expansion of an addional 2,000 MW in the next ve years and looks forward to a slight improvement in 2015 earnings, with the start of operaons of TSI and Hedcor Sabangan. The Group will connue to ensure that capacity is maximized and customers are being served across the country.
Coal 828 MW
NonRenewable 1,357 MW Oil 529 MW
n o i t a r o p r o C r e w o P z i t i o b A
The 300-MW Therma South baseload plant, which ulizes modern circulang uidized bed technology, is expected to come online in 2015.
40
Plant Name
Net Sellable Capacity (MW)
% Ownership
Aributable Net Sellable Capacity (MW)
Management Company
Oaker
Am Ambuklao
105
50
52.5
SNAP Benguet
WESM
B akun
70
100
70
Luzo Luzon n Hydr Hydro o
NPC NPC (202 (2026) 6) / BOT BOT
Benguet 1-11
37.5
100
37.5
Hedcor
NPC (2018) / BOO / Bilaterals
Binga
125.8
50
62.9
SNAP Benguet
WESM / NGCP
D avao 1-5
4.5
100
4.5
Hedcor
Davao Light
M agat
3 60
50
18 0
SNAP Magat
WESM / Coops / NGCP
Si Sibulan
49
100
49
Hedcor Sibulan
Davao Light
Tudaya
7
10 0
7
Hedcor Tudaya
DASURECO
Tiwi-MakBa n
390
100
39 0
APRI
WESM / Bilaterals
ULGPP
40
100
40
AESI
IPPA (2022) / VECO NPC (2031) / BOT
Mi Mindana o
210
34
71.4
STEAG State Power
Pagbilao
70 0
100
70 0
TL I
IIPA (2025) / Bilaterals / WESM
To Toledo
216
26
56
C EDC
Bilaterals
Cebu
66
60
39.6
CPPC
VECO
Cotabato
6.5
100
6.5
Cotabato Light
Cotabato Light
D avao
38
100
38
Davao Light
Davao Light
General Santos
55
20
11
SPPC
NPC (2016) / BOO
Mactan
43
50
21.5
EAUC
M EPZ I
Mobile 1
96
1 00
96
Therma Marine
Bilaterals
Mobile 2
96
1 00
96
Therma Marine
Bilaterals
Mobile 3-6
20 0
1 00
20 0
Therma Mobile
Bilaterals
Zamboanga
10 0
20
20
WMPC
NPC (2015) / BOO
3,015
t r o p e R l a u n n A
4 1 0 2
2,250
41
Business Review: Power Generaon Companies Overview AboizPower’s AboizPower’s porolio of generaon assets accounts for 15% of the country’s installed generaon capacity
By the second quarter of 2015, Hedcor expects to complete the 14-MW Sabangan project, the company’s rst plant in Mountain Province. Construcon of the 68MW Manolo Forch plant in Bukidnon is also underway as compliance requirements for the project have already been secured.
Coal Aributable energy sold from AboizPower’s AboizPower’s coal power plants amounted to 5,511 GWh, slightly up by 2% from 2013. However, revenues from coal plants were lower by 1% to P23.7 billion, mainly driven by forced outages experienced by STEAG State Power, Inc. during the rst half of the year and Therma Luzon, Inc. (TLI) during the onset of typhoon Glenda. Capacity sold factor sll rose to 93%, up by 3% year-on-year as a result of the full-year eect of TLI’s ASPA with NGCP for 2014. With demand for power expected to rise in the coming years, AboizPower aims to provide reliable power through its various baseload plants. Hence, the company launched the 420-MW Pagbilao III circulang uidized bed (CFB) coal-red plant of Pagbilao Energy Corporaon, Corporaon, a consorum of AboizPower and TeaM Energy Corporaon. Corporaon. Compleon is expected in 2017. Meanwhile, the 300-MW CFB coal-red plant of Therma South, Inc. (TSI) in Davao will be online within 2015 and will provide much-needed power to the Mindanao grid.
Meanwhile, the 340-MW Therma Visayas baseload plant in Cebu will likewise commence construcon in 2015, and the 600-MW Subic plant is expected to resume construcon aer hurdling legal challenges.
Aributable Net Sellable Capacity by Type
Oil The Oil Group performed well in 2014 with an aributable energy sold of 1,504 GWh, 25% higher from 2013. Capacity sold factor also went up to 95%, which translates to revenues of P12.9 billion, 46% higher than the previous year. The strong growth in revenues largely came from the full operaons of Therma Mobile, Inc. (TMO) in 2014 and its increase in capacity by another 100 MW aer the rehabilitaon of its Navotas barges. TMO will connue to supply a total of 200 MW of capacity to its sole customer Meralco in 2015.
Hydro 463 MW Renewable 893 MW
Meanwhile, Therma Marine’s power barges M1 and M2 were ulized at near-baseload levels in 2014 due to the connuous power supply shortages in Mindanao region.
Geothermal 430 MW
Overall, the Generaon Group is on target in its capacity expansion of an addional 2,000 MW in the next ve years and looks forward to a slight improvement in 2015 earnings, with the start of operaons of TSI and Hedcor Sabangan. The Group will connue to ensure that capacity is maximized and customers are being served across the country.
Coal 828 MW
NonRenewable 1,357 MW Oil 529 MW
n o i t a r o p r o C r e w o P z i t i o b A
Plant Name
Net Sellable Capacity (MW)
% Ownership
Aributable Net Sellable Capacity (MW)
Management Company
Oaker
Am Ambuklao
105
50
52.5
SNAP Benguet
WESM
B akun
70
100
70
Luzo Luzon n Hydr Hydro o
NPC NPC (202 (2026) 6) / BOT BOT
Benguet 1-11
37.5
100
37.5
Hedcor
NPC (2018) / BOO / Bilaterals
Binga
125.8
50
62.9
SNAP Benguet
WESM / NGCP
D avao 1-5
4.5
100
4.5
Hedcor
Davao Light
M agat
3 60
50
18 0
SNAP Magat
WESM / Coops / NGCP
Si Sibulan
49
100
49
Hedcor Sibulan
Davao Light
Tudaya
7
10 0
7
Hedcor Tudaya
DASURECO
Tiwi-MakBa n
390
100
39 0
APRI
WESM / Bilaterals
ULGPP
40
100
40
AESI
IPPA (2022) / VECO NPC (2031) / BOT
Mi Mindana o
210
34
71.4
STEAG State Power
Pagbilao
70 0
100
70 0
TL I
IIPA (2025) / Bilaterals / WESM
To Toledo
216
26
56
C EDC
Bilaterals
Cebu
66
60
39.6
CPPC
VECO
Cotabato
6.5
100
6.5
Cotabato Light
Cotabato Light
D avao
38
100
38
Davao Light
Davao Light
General Santos
55
20
11
SPPC
NPC (2016) / BOO
Mactan
43
50
21.5
EAUC
M EPZ I
Mobile 1
96
1 00
96
Therma Marine
Bilaterals
Mobile 2
96
1 00
96
Therma Marine
Bilaterals
Mobile 3-6
20 0
1 00
20 0
Therma Mobile
Bilaterals
Zamboanga
10 0
20
20
WMPC
NPC (2015) / BOO
The 300-MW Therma South baseload plant, which ulizes modern circulang uidized bed technology, is expected to come online in 2015.
3,015
t r o p e R l a u n n A
4 1 0 2
2,250
40
41
Business Review: Power Power Distribution Distrib ution
As in the previous year, all distribuon ulies (DUs) in 2014 registered system losses under the 8.5% government-mandated cap that resulted to lower rates. Notably, Notably, the DUs succeeded in further reducing their system losses in 2014 aer already being below the cap in 2013.
The AboizPower Distribuon Group’s revenues increased by 11% from P29.1 billion to P32.3 billion. The growth was driven by Davao Light’s energy sales amounng to 1,980 GWh, a 12% increase from the previous year, and VECO’s 5% higher aributable energy sales to 1,397 GWh. Moreover, the four EnerZones recorded a growth in total energy sales of 21% to 748 GWh due to a 16% growth in demand in Subic EnerZone and the addion of LiMA EnerZone to the Distribuon Group porolio. The Group’s income share was largely unchanged at P3.2 billion in 2014. As a segment, this represents a 19% contribuon to AboizPower’s 2014 results. Benecial energy sales increased by 10% to 4,480 GWh from 4,076 GWh in 2013. The growth was driven primarily by a 15% increase in the industrial customers’ segment. Sales to industrial customers in 2014 reached 2,758 GWh. Energy sales from residenal customers increased as well by 3% to 1,117 GWh, while sales from commercial customers grew by 2% to 548 GWh. Moreover, customer growth for all distribuon ulies was up by 4%, with 843,802 customers served in 2014.
System loss (%)
201 2
2013 2014
Davao Light
7.50%
7.87% 5.66%
Cotabato Light
9.50%
8.32% 8.26%
VECO
8.90%
7.79% 7.83%
SFELAPCO
2.06%
8.74% 5.84%
Subic En EnerZone
4.40%
4.11% 3.51%
Mactan EnerZone
1.10%
1.05% 1.09%
B al ala mb mba n En er erZo ne ne
1 .6 .6 0% 0%
LiMA EnerZone Davao Light employs skilled linemen to work on its electric poles.
1 .4 .4 4% 4% 0.99%
2.48%
The year presented some challenges as the Mindanao grid faced a supply shorall in the rst half of the year. But outages in Davao Light and Cotabato Light were minimized by the standby power plans as well as parcipaon of many large customers to the Interrupble Load Program (ILP). Pioneered by VECO, the ILP is a system relief program aimed to ease the supply shortage in the Visayas grid, and it is now also being implemented by Davao Light. In 2014, various projects were completed to further improve service eciency and reliability. VECO completed its rst one-kilometer underground distribuon system in Cebu City, from the Provincial Capitol to the Fuente Osmeña Circle. Two 100-megavolt ampere power transformers were also commissioned. AboizPower was also given support by the United States Trade and Development Agency to develop a smart grid roadmap and i mplementaon plan for the Visayas region. As a result, the Hawkeye Smart Elevated Meter Cluster technology was devised and deployed by VECO in 2014.
(in Php millions)
n o i t a r o p r o C r e w o P z i t i o b A
Power Distribuon (Benecial)
2 0 12
2013 2014
Reve Revenu nues es
27, 27,72 726 6
29 29,0 ,093 93 32,258
% change (2014 vs. 2013)
11%
EBITDA
4 , 55 4
5,270 5,480
4%
Income contribuon
2,795
3,227 3,203
-1%
Benecial power sales and peak demand
20 12
2013 2014
Power sales (GWh)
3,934
4,076 4,480
10%
Peak demand (MW)
964
1,026 1,102
7%
t r o p e R l a u n n A
% change (2014 vs. 2013)
4 1 0 VECO engineers inspect a TR4 transformer in Cebu. The distribuon ulity ensures that its facilies and 2
equipment are always well maintained to provide customers with reliable service.
42
43
Business Review: Power Power Distribution Distrib ution
As in the previous year, all distribuon ulies (DUs) in 2014 registered system losses under the 8.5% government-mandated cap that resulted to lower rates. Notably, Notably, the DUs succeeded in further reducing their system losses in 2014 aer already being below the cap in 2013.
The AboizPower Distribuon Group’s revenues increased by 11% from P29.1 billion to P32.3 billion. The growth was driven by Davao Light’s energy sales amounng to 1,980 GWh, a 12% increase from the previous year, and VECO’s 5% higher aributable energy sales to 1,397 GWh. Moreover, the four EnerZones recorded a growth in total energy sales of 21% to 748 GWh due to a 16% growth in demand in Subic EnerZone and the addion of LiMA EnerZone to the Distribuon Group porolio. The Group’s income share was largely unchanged at P3.2 billion in 2014. As a segment, this represents a 19% contribuon to AboizPower’s 2014 results. Benecial energy sales increased by 10% to 4,480 GWh from 4,076 GWh in 2013. The growth was driven primarily by a 15% increase in the industrial customers’ segment. Sales to industrial customers in 2014 reached 2,758 GWh. Energy sales from residenal customers increased as well by 3% to 1,117 GWh, while sales from commercial customers grew by 2% to 548 GWh. Moreover, customer growth for all distribuon ulies was up by 4%, with 843,802 customers served in 2014.
System loss (%)
201 2
2013 2014
Davao Light
7.50%
7.87% 5.66%
Cotabato Light
9.50%
8.32% 8.26%
VECO
8.90%
7.79% 7.83%
SFELAPCO
2.06%
8.74% 5.84%
Subic En EnerZone
4.40%
4.11% 3.51%
Mactan EnerZone
1.10%
1.05% 1.09%
B al ala mb mba n En er erZo ne ne
1 .6 .6 0% 0%
1 .4 .4 4% 4% 0.99%
LiMA EnerZone Davao Light employs skilled linemen to work on its electric poles.
2.48%
The year presented some challenges as the Mindanao grid faced a supply shorall in the rst half of the year. But outages in Davao Light and Cotabato Light were minimized by the standby power plans as well as parcipaon of many large customers to the Interrupble Load Program (ILP). Pioneered by VECO, the ILP is a system relief program aimed to ease the supply shortage in the Visayas grid, and it is now also being implemented by Davao Light. In 2014, various projects were completed to further improve service eciency and reliability. VECO completed its rst one-kilometer underground distribuon system in Cebu City, from the Provincial Capitol to the Fuente Osmeña Circle. Two 100-megavolt ampere power transformers were also commissioned. AboizPower was also given support by the United States Trade and Development Agency to develop a smart grid roadmap and i mplementaon plan for the Visayas region. As a result, the Hawkeye Smart Elevated Meter Cluster technology was devised and deployed by VECO in 2014.
(in Php millions)
n o i t a r o p r o C r e w o P z i t i o b A
Power Distribuon (Benecial)
2 0 12
2013 2014
Reve Revenu nues es
27, 27,72 726 6
29 29,0 ,093 93 32,258
EBITDA
4 , 55 4
5,270 5,480
4%
Income contribuon
2,795
3,227 3,203
-1%
% change (2014 vs. 2013)
11%
Benecial power sales and peak demand
20 12
Power sales (GWh)
3,934
4,076 4,480
10%
Peak demand (MW)
964
1,026 1,102
7%
2013 2014
t r o p e R l a u n n A
% change (2014 vs. 2013)
4 1 0 VECO engineers inspect a TR4 transformer in Cebu. The distribuon ulity ensures that its facilies and 2
equipment are always well maintained to provide customers with reliable service.
42
43
Business Review: Power Davao Light is gearing up for the incoming power supply from Therma South, Inc. (TSI) by compleng its 69-kilovolt (kV) substaon. It has also begun a sevenyear project to build a robust and reliable distribuon network with the installaon of a 69-kV loop system. With an increase in commercial establishments in its franchise area and stable power supply from the TSI Davao Coal project, Davao Light is looking to a fruiul year ahead. Cotabato Light’s franchise has been renewed for an addional 25 years, and it is looking forward to a favorable favorable year with more commercial establishments coming to the city coupled with the steady power supply from TSI Davao. The Power Distribuon Group is expecng another strong year ahead despite the a mild drought in Mindanao; the presence of TSI is expected to meet any shorall in supply.
The Group’s drive to innovate and modernize services will connue in 2015. The Hawkeye Smart Elevated Meter Cluster technology will begin to be implemented across the enre distribuon group. Most importantly, the technology will ensure system resiliency to limit the impact of natural and manmade disasters, as well as further minimize system loss. To improve operang eciency and bring down costs, three major iniaves will connue to be implemented across the Group in 2015. These are the rollout of the Quanrisk Energy Management system to other ulies aer its successful deployment in VECO; Oracle’s Meter Data Management that is set to go live by year-end 2015; and the connued development of Google Maps-based applicaons. Underground cabling will connue in VECO’s franchise area while Davao Light will implement it in 2105. Davao Light will also expand its e-Bill service to all customers.
2015 Outlook: Building A Beer Future For 2015 to 2019, AboizPower AboizPower has lined up greeneld greeneld and browneld projects across the country to meet its target to increase capacity by 2,000 MW. The company will also connue to pursue development opportunies, both locally and abroad, in other energy technologies. The Generaon Group recently announced its foray into solar energy, partnering with United States-based SunEdison to explore the development of up to 300 MW of ulity-scale solar photovoltaic power generaon projects in the Philippines over the next three years. It has also successfully idened idened roughly 200 MW of potenal run-of-river hydro power projects located across the archipelago for the next ve years.
n o i t a r o p r o C r e w o P z i t i o b A
44
However, today, while the naon is sll in the process of increasing its power supply capacity, it nds itself in the midst of a power shortage in Luzon in 2015. AboizPower has heeded government’s call for an expanded ILP to combat this supply decit, and has encouraged both its contestable customers and DU customers to parcipate in the program. Eighty customers have commied to parcipate, with a total 177 MW of deloading capacity made available available to the Luzon grid. The company is opmisc that ILP, along with energy conservaon measures, will be sucient
to address this temporary shorall while it waits for the compleon of more power plants. These challenges only reinforce the need to relentlessly pursue reforms in the power sector, such as Open Access, which AboizPower strongly believes is the best way to support the power industry’s connued expansion. The company looks forward to the connued drop in the threshold for contestable customers from the current 1 MW and above, to 750 kilowas (kW), and eventually to 500 kW, in order to encourage more investors and assure the viability of the Philippine power industry. Although this may pose as a threat to its franchises, AboizPower believes that its knowledge of the industry allows the company to oer beer power soluons that will dierenate it from its competors. Looking ahead, the company would like to maximize the benets of Open Access to further improve income and reduce risks. It intends to have a balanced porolio of contracted and spot capacity, and contract majority of its baseload and diesel capacity under price-stable bilateral contracts, while oering most of its hydropower capacity for peaking and ancillary services. Doing it this way will minimize volality while yielding the highest returns for its resources.
Business Review: Power Davao Light is gearing up for the incoming power supply from Therma South, Inc. (TSI) by compleng its 69-kilovolt (kV) substaon. It has also begun a sevenyear project to build a robust and reliable distribuon network with the installaon of a 69-kV loop system. With an increase in commercial establishments in its franchise area and stable power supply from the TSI Davao Coal project, Davao Light is looking to a fruiul year ahead. Cotabato Light’s franchise has been renewed for an addional 25 years, and it is looking forward to a favorable favorable year with more commercial establishments coming to the city coupled with the steady power supply from TSI Davao. The Power Distribuon Group is expecng another strong year ahead despite the a mild drought in Mindanao; the presence of TSI is expected to meet any shorall in supply.
The Group’s drive to innovate and modernize services will connue in 2015. The Hawkeye Smart Elevated Meter Cluster technology will begin to be implemented across the enre distribuon group. Most importantly, the technology will ensure system resiliency to limit the impact of natural and manmade disasters, as well as further minimize system loss. To improve operang eciency and bring down costs, three major iniaves will connue to be implemented across the Group in 2015. These are the rollout of the Quanrisk Energy Management system to other ulies aer its successful deployment in VECO; Oracle’s Meter Data Management that is set to go live by year-end 2015; and the connued development of Google Maps-based applicaons. Underground cabling will connue in VECO’s franchise area while Davao Light will implement it in 2105. Davao Light will also expand its e-Bill service to all customers.
2015 Outlook: Building A Beer Future For 2015 to 2019, AboizPower AboizPower has lined up greeneld greeneld and browneld projects across the country to meet its target to increase capacity by 2,000 MW. The company will also connue to pursue development opportunies, both locally and abroad, in other energy technologies. The Generaon Group recently announced its foray into solar energy, partnering with United States-based SunEdison to explore the development of up to 300 MW of ulity-scale solar photovoltaic power generaon projects in the Philippines over the next three years. It has also successfully idened idened roughly 200 MW of potenal run-of-river hydro power projects located across the archipelago for the next ve years.
n o i t a r o p r o C r e w o P z i t i o b A
However, today, while the naon is sll in the process of increasing its power supply capacity, it nds itself in the midst of a power shortage in Luzon in 2015. AboizPower has heeded government’s call for an expanded ILP to combat this supply decit, and has encouraged both its contestable customers and DU customers to parcipate in the program. Eighty customers have commied to parcipate, with a total 177 MW of deloading capacity made available available to the Luzon grid. The company is opmisc that ILP, along with energy conservaon measures, will be sucient
to address this temporary shorall while it waits for the compleon of more power plants. These challenges only reinforce the need to relentlessly pursue reforms in the power sector, such as Open Access, which AboizPower strongly believes is the best way to support the power industry’s connued expansion. The company looks forward to the connued drop in the threshold for contestable customers from the current 1 MW and above, to 750 kilowas (kW), and eventually to 500 kW, in order to encourage more investors and assure the viability of the Philippine power industry. Although this may pose as a threat to its franchises, AboizPower believes that its knowledge of the industry allows the company to oer beer power soluons that will dierenate it from its competors. Looking ahead, the company would like to maximize the benets of Open Access to further improve income and reduce risks. It intends to have a balanced porolio of contracted and spot capacity, and contract majority of its baseload and diesel capacity under price-stable bilateral contracts, while oering most of its hydropower capacity for peaking and ancillary services. Doing it this way will minimize volality while yielding the highest returns for its resources.
44
Business Review: Banking
“We are optimistic that we would be able to overcome the challenges that lie ahead. We are on track in the execution of our FOCUS 2020 strategy with the end view of becoming a great retail bank. We have a constancy of purpose that helps us ride through the cycles – to ‘Make Da Diff’ by fullling dreams, elevating lives, and enabling the communities we serve through Smart Banking (relevant, expert, challenging conventions) in the spirit of Ubuntu.” The UnionBank Planum MasterCard is a cash-back credit card that delivers instant 1.5% cash rebates on purchases.
Justo A. Orz Chairman and CEO
Results of Operations 2014 was a very challenging year for UnionBank and the enre banking industry, characterized by the connued compression of net interest margins and ghter regulatory oversight. UnionBank and its subsidiaries recorded a net income of P6.9 billion from the P9.0 billion registered in the previous year. This translated to lower protability raos: return on average equity at 15.3% and return on average assets at 1.7%, albeit beer than the industry’s 10.8% and 1.3%, respecvely. Revenue-to-expense rao was maintained at 2.0x, cemenng the Bank’s posion as among the industry’s least-cost producers.
. c n I , s e r u t n e V y t i u q E z i t i o b A
46
Gross revenues slid to P23.1 billion as a result of the 35% drop in other income, which was not oset by the 12% growth in interest income. However, income from UnionBank’s customer businesses rose to P15.7 billion, up by 7% from the previous year, driven by 15% and 34% increases in interest income on loans, and fee-based income to P9.6 billion and P3.3 billion, respecvely. These were underpinned by the healthy expansion in the credit porolio, primarily salary loans granted by City Savings Bank. Correspondi ng to this improvement, the share of customer businesses in gross revenues advanced to 68% from 57% a year ago. On the other hand, income from treasury businesses declined to P7.4 billion,
Thri bank CitySavings, UnionBank’s wholly owned subsidiary, connues to expand its reach beyond Visayas and Mindanao. By year-end 2014, it had 65 branches naonwide.
t r o p e R l a u n n A
4 1 0 2
47
Business Review: Banking
“We are optimistic that we would be able to overcome the challenges that lie ahead. We are on track in the execution of our FOCUS 2020 strategy with the end view of becoming a great retail bank. We have a constancy of purpose that helps us ride through the cycles – to ‘Make Da Diff’ by fullling dreams, elevating lives, and enabling the communities we serve through Smart Banking (relevant, expert, challenging conventions) in the spirit of Ubuntu.” The UnionBank Planum MasterCard is a cash-back credit card that delivers instant 1.5% cash rebates on purchases.
Justo A. Orz Chairman and CEO
Results of Operations 2014 was a very challenging year for UnionBank and the enre banking industry, characterized by the connued compression of net interest margins and ghter regulatory oversight. UnionBank and its subsidiaries recorded a net income of P6.9 billion from the P9.0 billion registered in the previous year. This translated to lower protability raos: return on average equity at 15.3% and return on average assets at 1.7%, albeit beer than the industry’s 10.8% and 1.3%, respecvely. Revenue-to-expense rao was maintained at 2.0x, cemenng the Bank’s posion as among the industry’s least-cost producers.
. c n I , s e r u t n e V y t i u q E z i t i o b A
Gross revenues slid to P23.1 billion as a result of the 35% drop in other income, which was not oset by the 12% growth in interest income. However, income from UnionBank’s customer businesses rose to P15.7 billion, up by 7% from the previous year, driven by 15% and 34% increases in interest income on loans, and fee-based income to P9.6 billion and P3.3 billion, respecvely. These were underpinned by the healthy expansion in the credit porolio, primarily salary loans granted by City Savings Bank. Correspondi ng to this improvement, the share of customer businesses in gross revenues advanced to 68% from 57% a year ago. On the other hand, income from treasury businesses declined to P7.4 billion,
46
equivalent to 32% of gross revenue, as trading gains fell to P1.9 billion.
2015 Outlook
Total resources resources expanded by 12% to P 443.1 billion, funded mainly by the increase in bills payable to P48.4 billion and solid growth in total deposits to P311.1 billion. Average low-cost low-cost CASA (current and savings accounts) deposits increased by 22%, reecng the Bank’s connued execuon of its branch sales and cash management strategies. Average credit porolio sustained its double-digit expansion as it rose by 13% to P125.0 billion fuelled by the robust growth in salary loans, which surged to P34.1 billion. Consequently, Consequently, total retail loans rose by over a quarter to P55.7 billion, improving its share of average credit credit porolio to 45% from 38%. Middlemarket lending similarly posted a modest growth of 3% to P23.9 billion while corporate loans were stable at P45.4 billion.
Looking ahead, UnionBank will connue to grow its retail assets, parcularly credit card, mortgage, and salary loans. The Bank will deepen customer customer relaonships and broaden its franchise as it pursues high-return retail businesses and grow fee-based transacons. To support margins, it will connue focusing on its debit card and agship cash management businesses. Given the early adopon of Philippine Financial Reporng Standard 9 (PFRS 9), UnionBank expects reduced volality in its capital line. As such, the Bank can increase increase risk assets as planned to improve the accrual business, even as it keeps a close watch on the market for trading opportunies. As UnionBank expands its balance sheet, it will invest in risk management capabilies at an enterprise level and sustain deposit build-up iniaves concentrang on CASA. The Bank shall further strengthen its culture and promote employee and customer engagement as a means to enhance its compeve edge in a fast commodizing marketplace.
(in Php billion)
Ba Banking
20 12
2 0 1 3*
3,331.4 519.6
4,115.0
7.3 1.4
8.9
UnionBank CitySavings
119.7 13.1
UnionBank CitySavings
Net Income Contribuon to AEV A EV (In Php millions) UnionBank CitySavings
2014**
% change (2014 vs. 2013)
3,244
-21%
10.6
20%
142.1
139.4
-2%
189.8 8.8
298.2
311.1
4%
UnionBank CitySavings
0.3% 1.6%
-0.3%
0.6%
Return on Average Equity UnionBank CitySavings
17.5% 26.2%
18.3%
15.3%
Return on Average Assets UnionBank CitySavings
3.1% 3.4%
2.6%
1.7%
Net Interest income UnionBank CitySavings Total Loans
Total Deposits
48
t r o p e R l a u n n A
4 1 0 2
47
Business Review: Banking
. c n I , s e r u t n e V y t i u q E z i t i o b A
Thri bank CitySavings, UnionBank’s wholly owned subsidiary, connues to expand its reach beyond Visayas and Mindanao. By year-end 2014, it had 65 branches naonwide.
Net NPL raos
*On March 21, 2013, the Monetary Board of Bangko Sentral ng Pilipinas (BSP) approved UnionBank’s acquision of CitySavings. **Measure in terms of Philippine Accounng Standards 39 Financial Instute, consistent with AEV’s use of that standard.
Business Review: Banking equivalent to 32% of gross revenue, as trading gains fell to P1.9 billion.
2015 Outlook
Total resources resources expanded by 12% to P 443.1 billion, funded mainly by the increase in bills payable to P48.4 billion and solid growth in total deposits to P311.1 billion. Average low-cost low-cost CASA (current and savings accounts) deposits increased by 22%, reecng the Bank’s connued execuon of its branch sales and cash management strategies. Average credit porolio sustained its double-digit expansion as it rose by 13% to P125.0 billion fuelled by the robust growth in salary loans, which surged to P34.1 billion. Consequently, Consequently, total retail loans rose by over a quarter to P55.7 billion, improving its share of average credit credit porolio to 45% from 38%. Middlemarket lending similarly posted a modest growth of 3% to P23.9 billion while corporate loans were stable at P45.4 billion.
Looking ahead, UnionBank will connue to grow its retail assets, parcularly credit card, mortgage, and salary loans. The Bank will deepen customer customer relaonships and broaden its franchise as it pursues high-return retail businesses and grow fee-based transacons. To support margins, it will connue focusing on its debit card and agship cash management businesses. Given the early adopon of Philippine Financial Reporng Standard 9 (PFRS 9), UnionBank expects reduced volality in its capital line. As such, the Bank can increase increase risk assets as planned to improve the accrual business, even as it keeps a close watch on the market for trading opportunies. As UnionBank expands its balance sheet, it will invest in risk management capabilies at an enterprise level and sustain deposit build-up iniaves concentrang on CASA. The Bank shall further strengthen its culture and promote employee and customer engagement as a means to enhance its compeve edge in a fast commodizing marketplace.
(in Php billion)
Ba Banking
20 12
2 0 1 3*
3,331.4 519.6
4,115.0
7.3 1.4
8.9
UnionBank CitySavings
119.7 13.1
UnionBank CitySavings
Net Income Contribuon to AEV A EV (In Php millions) UnionBank CitySavings
2014** 3,244
-21%
10.6
20%
142.1
139.4
-2%
189.8 8.8
298.2
311.1
4%
UnionBank CitySavings
0.3% 1.6%
-0.3%
0.6%
Return on Average Equity UnionBank CitySavings
17.5% 26.2%
18.3%
15.3%
Return on Average Assets UnionBank CitySavings
3.1% 3.4%
2.6%
1.7%
Net Interest income UnionBank CitySavings
% change (2014 vs. 2013)
Total Loans
Total Deposits
. c n I , s e r u t n e V y t i u q E z i t i o b A
Net NPL raos
*On March 21, 2013, the Monetary Board of Bangko Sentral ng Pilipinas (BSP) approved UnionBank’s acquision of CitySavings. **Measure in terms of Philippine Accounng Standards 39 Financial Instute, consistent with AEV’s use of that standard.
48
Business Review: Food “Our quest for growth and expansion has taken us outside the Philippines, with our rst acquisition of an aqua feed mill in Vietnam in 2014, and we have many more plans in the pipeline for 2015. The rst few steps have been challenging and quite a slow process, but we will accelerate our pace in the next two years. Our expansion, both here and abroad, will provide our team members with endless opportunities for professional and personal growth. At the same time, it will create crea te opportunities for employment that will help local economies especially in areas where we operate. The opportunities are now here and are real, so we need to continuously gear up and arm ourselves with more skills, knowledge, and experience. 2015 will be the beginning of our move towards building a more purpose-driven organization, guided by our core values of integrity, teamwork, innovation and responsibility. “ Sabin M. Aboiz . c n I , s e r u t n e V y t i u q E z i t i o b A
50
President and CEO
Pilmico will advance eorts to further gain market share in the our industry by exporng to the ASEAN region, opening a Pilmico Research & Training Bakery in Cebu, and building its own commissary.
Results of Operations In 2014, Pi lmico and the Aboiz Group ocially entered the ASEAN market with Pilmico Internaonal successfully acquiring a 70% equity stake in Vietnamese aqua feeds producer Vinh Hoan 1 Feed JSC (VHF). The remaining 30% stake will be bought in the next ve years at an agreed preset price. Total investment cost in VHF amounts to US $28 million. The company also established a representave representave oce i n Indonesia. On the local front, Pilmico made strides in being partners for growth with a series of projects. With the farms’ backyard segment experiencing a drop in its sow inventory, inventory, the company took the opportunity to support backyard farmers through an advocacy program that aims to ensure sustainability in their farms. MahalinPagkaingAn was inially launched in disaster-stricken
areas of Leyte, Cebu, Bohol. Its goal is to go beyond rehabilitaon and start livelihood programs for backyard farmers. For this campaign, a total of 100 egg machine kits were distributed in Leyte province to encourage farmers to engage in poultry
t r o p e R l a u n n A
4 1
Following a 64% YOY growth in the farms’ EBITDA, Pilmico 0 will increase its sow level to 14,000 heads to strengthen 2 its feeds business in the compeve Luzon market.
51
Business Review: Food “Our quest for growth and expansion has taken us outside the Philippines, with our rst acquisition of an aqua feed mill in Vietnam in 2014, and we have many more plans in the pipeline for 2015. The rst few steps have been challenging and quite a slow process, but we will accelerate our pace in the next two years. Our expansion, both here and abroad, will provide our team members with endless opportunities for professional and personal growth. At the same time, it will create crea te opportunities for employment that will help local economies especially in areas where we operate. The opportunities are now here and are real, so we need to continuously gear up and arm ourselves with more skills, knowledge, and experience. 2015 will be the beginning of our move towards building a more purpose-driven organization, guided by our core values of integrity, teamwork, innovation and responsibility. “ Sabin M. Aboiz President and CEO
. c n I , s e r u t n e V y t i u q E z i t i o b A
On the local front, Pilmico made strides in being partners for growth with a series of projects.
MahalinPagkaingAn was inially launched in disaster-stricken
areas of Leyte, Cebu, Bohol. Its goal is to go beyond rehabilitaon and start livelihood programs for backyard farmers. For this campaign, a total of 100 egg machine kits were distributed in Leyte province to encourage farmers to engage in poultry
t r o p e R l a u n n A
4 1
Following a 64% YOY growth in the farms’ EBITDA, Pilmico 0 will increase its sow level to 14,000 heads to strengthen 2 its feeds business in the compeve Luzon market.
51
Business Review: Food producon. This provides a quick and sustainable livelihood for Yolanda vicms in Eastern Visayas.
2015 Outlook
In line with MahalinPagkaingAn , the Pilmico Livelihood Expo was held in Cagayan de Oro City. Acvies included free seminars and live demos on the latest pracces and technology in hog raising and gamefowl breeding, as well as in bakery operaons.
Pilmico operates primarily in a demand-driven market. The fast-rising private consumpon in the coming years will bring in greater demand and drive larger volume producon. For these reasons, the company strives to achieve eciencies through economies of scale and integraon. It aims to protect margins and grow market share through strategic expansion and by connuing to be a low-cost producer.
With its annual revenues at P20 billion in 2014, Pilmico recorded a 22% year-on-year (YOY) hike largely driven by strengthened volume growth, with the feeds and farms businesses as major contributors. The newly acquired feed mill in Vietnam likewise contributed P1.7 billion in revenues to the Food Group.
With the ASEAN integraon in play, compeon is expected to get tougher both on the domesc and regional fronts. The company also expects to raise the bar for innovaon and quality as it competes head-on with regional players.
The Food Group’s full-year EBITDA also went up by 12% YOY, with the farms division contribung the most to the growth. The improvement in market hog prices, increase in volume, along with operang eciencies, translated to a 64% YOY growth in the farms’ EBITDA.
Pilmico aims to strengthen its our business as it bales for market share against cheaper imported our. The company will export its our products to the ASEAN region, build a Pilmico Research & Training Bakery in Cebu, as well as explore the commissary business.
The rise in commodity prices, which accounts for majority of the costs, aected the our and feeds businesses. Flour EBITDA went down by 2%, while the feeds EBITDA dropped by 6% due to the increase in raw materials, operang expenses, and the one-me project costs for the investment in Vietnam as well as other growth iniaves. Feeds Vietnam pitched in P45 million to EBITDA growth.
To answer consumer demand, the feeds business will increase its producon capacies in Iligan and Tarlac, build a new inter-island pier facility for raw materials and nished goods, and introduce addional feeds products.
The last two years saw the expiraon of the income tax holidays of Iligan Feed Mill 1 & 2 with the bulk of the impact felt in 2014. This resulted to P108 million in taxes paid in 2014, eecvely dragging net income lower. lower.
52
Results of Operations In 2014, Pi lmico and the Aboiz Group ocially entered the ASEAN market with Pilmico Internaonal successfully acquiring a 70% equity stake in Vietnamese aqua feeds producer Vinh Hoan 1 Feed JSC (VHF). The remaining 30% stake will be bought in the next ve years at an agreed preset price. Total investment cost in VHF amounts to US $28 million. The company also established a representave representave oce i n Indonesia.
With the farms’ backyard segment experiencing a drop in its sow inventory, inventory, the company took the opportunity to support backyard farmers through an advocacy program that aims to ensure sustainability in their farms.
50
. c n I , s e r u t n e V y t i u q E z i t i o b A
Pilmico will advance eorts to further gain market share in the our industry by exporng to the ASEAN region, opening a Pilmico Research & Training Bakery in Cebu, and building its own commissary.
All of these translated to a 4% increase in Pilmico’s contribuon to AEV of P1.3 billion.
The farms business will increase its sow level to 14,000 heads, build addional farm facilies, accelerate capability for its meats business, and operate its own layers farms with a monthly output of four million eggs. Internaonally, Internaonally, Pilmico VHF is set to expand its aqua feed mill in Vietnam. In addion to the exisng representave oce in Indonesia, it is also seng up another one in Vietnam. Pilmico will also acvely pursue other opportunies in the region through mergers and acquisions.
(in Php millions)
% change
Food
2 01 2
20 13
2014
Revenues
15,700
16,426
20,020
22%
EBITDA
2,054
2,059
2,311
12%
Income Contribuon
1,299
1,256
1,307
4%
(2014 vs. 2013)
Business Review: Food producon. This provides a quick and sustainable livelihood for Yolanda vicms in Eastern Visayas.
2015 Outlook
In line with MahalinPagkaingAn , the Pilmico Livelihood Expo was held in Cagayan de Oro City. Acvies included free seminars and live demos on the latest pracces and technology in hog raising and gamefowl breeding, as well as in bakery operaons. With its annual revenues at P20 billion in 2014, Pilmico recorded a 22% year-on-year (YOY) hike largely driven by strengthened volume growth, with the feeds and farms businesses as major contributors. The newly acquired feed mill in Vietnam likewise contributed P1.7 billion in revenues to the Food Group.
With the ASEAN integraon in play, compeon is expected to get tougher both on the domesc and regional fronts. The company also expects to raise the bar for innovaon and quality as it competes head-on with regional players.
The Food Group’s full-year EBITDA also went up by 12% YOY, with the farms division contribung the most to the growth. The improvement in market hog prices, increase in volume, along with operang eciencies, translated to a 64% YOY growth in the farms’ EBITDA.
Pilmico aims to strengthen its our business as it bales for market share against cheaper imported our. The company will export its our products to the ASEAN region, build a Pilmico Research & Training Bakery in Cebu, as well as explore the commissary business.
The rise in commodity prices, which accounts for majority of the costs, aected the our and feeds businesses. Flour EBITDA went down by 2%, while the feeds EBITDA dropped by 6% due to the increase in raw materials, operang expenses, and the one-me project costs for the investment in Vietnam as well as other growth iniaves. Feeds Vietnam pitched in P45 million to EBITDA growth.
To answer consumer demand, the feeds business will increase its producon capacies in Iligan and Tarlac, build a new inter-island pier facility for raw materials and nished goods, and introduce addional feeds products. The farms business will increase its sow level to 14,000 heads, build addional farm facilies, accelerate capability for its meats business, and operate its own layers farms with a monthly output of four million eggs.
The last two years saw the expiraon of the income tax holidays of Iligan Feed Mill 1 & 2 with the bulk of the impact felt in 2014. This resulted to P108 million in taxes paid in 2014, eecvely dragging net income lower. lower.
. c n I , s e r u t n e V y t i u q E z i t i o b A
Pilmico operates primarily in a demand-driven market. The fast-rising private consumpon in the coming years will bring in greater demand and drive larger volume producon. For these reasons, the company strives to achieve eciencies through economies of scale and integraon. It aims to protect margins and grow market share through strategic expansion and by connuing to be a low-cost producer.
Internaonally, Internaonally, Pilmico VHF is set to expand its aqua feed mill in Vietnam. In addion to the exisng representave oce in Indonesia, it is also seng up another one in Vietnam. Pilmico will also acvely pursue other opportunies in the region through mergers and acquisions.
All of these translated to a 4% increase in Pilmico’s contribuon to AEV of P1.3 billion.
(in Php millions)
% change
Food
2 01 2
20 13
2014
Revenues
15,700
16,426
20,020
22%
EBITDA
2,054
2,059
2,311
12%
Income Contribuon
1,299
1,256
1,307
4%
(2014 vs. 2013)
52
Business Review: Land
“We are at a very exhilarating phase in our journey as an organization. We have accepted the challenge to go national. We are keenly focused on achieving the bolder goals we have set for ourselves. We know that growth is never by chance but is the result of a dedicated team working closely together to achieve a singular vision.”
Andoni F. Aboiz President and CEO
In 2014, AboizLand residenal sales grew by 15% driven by its high-end projects such as Prisna North Residences 2 and Priveya Hills Phase 3, as well as a strong interest in The Persimmon Studios.
Results of Operations Over the past two decades, AboizLand has gone through a fullling journey, journey, delivering dream homes and business oces to more than 3,000 vecinos, merchants, and locators. In 2014, on its 20th year, the company took on the challenge to support and parcipate in the Philippines’ economic resurgence. resurgence. The economy has remained robust, as reected in reassuring indicators including posive GDP growth, low interest rates, and strong consumer spending. . c n I , s e r u t n e V y t i u q E z i t i o b A
54
Parallel to the country’s strengthening economy, economy, AboizLand likewise posted another record-breaking year. There was growth across all its business units as revenues went up by 86%, breaching the P3-billion mark and net income increased by 242%. The surge is aributed to the acquision of LiMA Land, Inc. (LLI), which brought in si gnicant incremental incremental industrial income, and the gains realized from the sale of LiMA Ulies Corp. to AboizPower. AboizPower. The residenal construcon accomplishment and the new revenue stream of the commercial business unit also contributed to the growth.
AboizLand’s record-breaking growth in 2014 surpassed P3 billion, aributed to the acquision of LiMA Land and proceeds from the sale of LiMA Ulies to AboizPower.
t r o p e R l a u n n A
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Business Review: Land
“We are at a very exhilarating phase in our journey as an organization. We have accepted the challenge to go national. We are keenly focused on achieving the bolder goals we have set for ourselves. We know that growth is never by chance but is the result of a dedicated team working closely together to achieve a singular vision.”
Andoni F. Aboiz
In 2014, AboizLand residenal sales grew by 15% driven by its high-end projects such as Prisna North Residences 2 and Priveya Hills Phase 3, as well as a strong interest in The Persimmon Studios.
President and CEO
Results of Operations Over the past two decades, AboizLand has gone through a fullling journey, journey, delivering dream homes and business oces to more than 3,000 vecinos, merchants, and locators. In 2014, on its 20th year, the company took on the challenge to support and parcipate in the Philippines’ economic resurgence. resurgence. The economy has remained robust, as reected in reassuring indicators including posive GDP growth, low interest rates, and strong consumer spending. . c n I , s e r u t n e V y t i u q E z i t i o b A
Parallel to the country’s strengthening economy, economy, AboizLand likewise posted another record-breaking year. There was growth across all its business units as revenues went up by 86%, breaching the P3-billion mark and net income increased by 242%. The surge is aributed to the acquision of LiMA Land, Inc. (LLI), which brought in si gnicant incremental incremental industrial income, and the gains realized from the sale of LiMA Ulies Corp. to AboizPower. AboizPower. The residenal construcon accomplishment and the new revenue stream of the commercial business unit also contributed to the growth.
AboizLand’s record-breaking growth in 2014 surpassed P3 billion, aributed to the acquision of LiMA Land and proceeds from the sale of LiMA Ulies to AboizPower.
54
Feature
(in Php millions)
% change
Land
20 1 3
2014
Revenues
1 ,7 6 0
3,270
86%
EBITDA
38 9
698
79%
Income Contribuon
273
633
132%
(2014 vs. 2013)
AboizLand’s AboizLand’s residenal sales grew by 15%, a welcome development driven by sales of its high-end projects, including Prisna North Residences 2 and Priveya Hills Phase 3. There was also a strong interest in The Persimmon Studios.
The company’s commercial unit beneed from the strong retail business environment, posng a 123% revenue growth. This is aributable to the performance of The Outlets at Pueblo Verde, Verde, which achieved 100% occupancy within its rst six months of operaons.
The industrial business unit spearhead ed the company’s naonal expansion when it acquired LLI. It is the developer of LiMA Technology Center in Batangas which currently comprises 77% of total industrial revenue. With this new acquision, AboizLand now owns and operates three major industrial zones including Mactan Economic Zone II and West Cebu Industrial Park.
As the real estate sector experiences sustained demand across residenal, commercial, and industrial segments, AboizLand will pursue its aggressive investment plan. The company will strengthen its organizaonal organizaonal capabilies to respond to the growing demands of both its Cebu and naonal markets.
Residential Sales up by
15% vs 2013 Residential Revenue 5-yr CAGR at
56
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Business Review: Land
. c n I , s e r u t n e V y t i u q E z i t i o b A
t r o p e R l a u n n A
16%
2015 Outlook
AboizLand will remain true to its promise of nurturing communies.
Job Opportunities provided to over
60,000 people
Infrastructure: APO Agua AEV has formed a new joint venture with J.V. Angeles Construcon Corporaon (JVACC). (JVACC). The joint venture, named Apo Agua Infrastructura, Inc. (APO Agua), is an agreement with the Davao City Water District (DCWD) to design, build, and operate the country’s largest largest private bulk water supply project at an esmated cost of P10 billion. This project is AEV’s rst non-power venture in infrastructure. infrastructure. Under the agreement, APO Agua will supply the DCWD with up to 300 million liters per day (MLD) of potable bulk water from the Tamugan River. The project will directly benet Davao City’s one million residents, and its many commercial and industrial establishments. JVACC, which has over 48 years of experience in the construcon and development of waterrelated infrastructure infrastructure in the Philippines, will be the engineering, procurement, and construcon (EPC) contractor for the enre project. The project includes the country’s rst 100% renewable energy-powered water treatment facility, giving Davao City the disncon of having an innovave and sustainable bulk water supply system. For the Aboiz Group, this venture is another testament of its commitment to Davao City and its people. For more than 80 years now, now, Aboiz has been supporng the city’s growth and advancement, providing quality and reliable electric service through Davao Light. Apart from the bulk water supply project, AEV is acvely parcipang in various Public-Private Partnership (PPP) bids including the Laguna Lakeshore Project (the largest PPP project to date), and the LRT-2 operaons and maintenance contract. In its connuing journey of supporng the naon’s long-term needs, the Aboiz Group will constantly be on the lookout for infrastructure investment opportunies.
A strong performance by the company’s commercial unit is credited in part to The Outlets at Pueblo Verde, which achieved 100% occupancy within the rst six months of operaons.
Representaves from Aboiz Equity Ventures and JV Angeles Construcon Corporaon sign the country’s largest bulk water supply deal with the Davao City Water District and the Davao City government, represented by Mayor Rodrigo Duterte.
Biofuel: Aseagas Aseagas Corporaon was established to build plants that would produce renewable renewable energy from society’s organic waste. This energy yields fuel for motor vehicles and generates power from renewable biogas. By-products from biogas producon include carbon dioxide (CO2) and ferlizer. The company receives CDM (Clean Development Mechanism) credits from the reduced carbon emission resulng from the process. Its rst producon plant is located in Lian, Batangas and the original goal was to produce fuel in the form of liqueed bio-methane or bio-liqueed natural gas. However, the current global environment of lower fuel prices has made the fuel environment very challenging, thus the company is exploring the best use for for biogas. At this me, alternaves include pursuing power generaon and registering operaons under the feed-in-tari of the Department of Energy. Plant construcon has begun and compleon is expected by year-end 2015.
t r o p e R l a u n n A
4 1 0 2
57
Business Review: Land
Feature
(in Php millions)
% change
Land
20 1 3
2014
Revenues
1 ,7 6 0
3,270
86%
EBITDA
38 9
698
79%
Income Contribuon
273
633
132%
(2014 vs. 2013)
AboizLand’s AboizLand’s residenal sales grew by 15%, a welcome development driven by sales of its high-end projects, including Prisna North Residences 2 and Priveya Hills Phase 3. There was also a strong interest in The Persimmon Studios.
The company’s commercial unit beneed from the strong retail business environment, posng a 123% revenue growth. This is aributable to the performance of The Outlets at Pueblo Verde, Verde, which achieved 100% occupancy within its rst six months of operaons.
The industrial business unit spearhead ed the company’s naonal expansion when it acquired LLI. It is the developer of LiMA Technology Center in Batangas which currently comprises 77% of total industrial revenue. With this new acquision, AboizLand now owns and operates three major industrial zones including Mactan Economic Zone II and West Cebu Industrial Park.
As the real estate sector experiences sustained demand across residenal, commercial, and industrial segments, AboizLand will pursue its aggressive investment plan. The company will strengthen its organizaonal organizaonal capabilies to respond to the growing demands of both its Cebu and naonal markets.
Residential Sales up by
2015 Outlook
AboizLand will remain true to its promise of nurturing communies.
15% vs 2013 Residential Revenue 5-yr CAGR at
Job Opportunities provided to over
60,000 people
16%
Infrastructure: APO Agua AEV has formed a new joint venture with J.V. Angeles Construcon Corporaon (JVACC). (JVACC). The joint venture, named Apo Agua Infrastructura, Inc. (APO Agua), is an agreement with the Davao City Water District (DCWD) to design, build, and operate the country’s largest largest private bulk water supply project at an esmated cost of P10 billion. This project is AEV’s rst non-power venture in infrastructure. infrastructure. Under the agreement, APO Agua will supply the DCWD with up to 300 million liters per day (MLD) of potable bulk water from the Tamugan River. The project will directly benet Davao City’s one million residents, and its many commercial and industrial establishments. JVACC, which has over 48 years of experience in the construcon and development of waterrelated infrastructure infrastructure in the Philippines, will be the engineering, procurement, and construcon (EPC) contractor for the enre project.
Biofuel: Aseagas
The project includes the country’s rst 100% renewable energy-powered water treatment facility, giving Davao City the disncon of having an innovave and sustainable bulk water supply system. For the Aboiz Group, this venture is another testament of its commitment to Davao City and its people. For more than 80 years now, now, Aboiz has been supporng the city’s growth and advancement, providing quality and reliable electric service through Davao Light. Apart from the bulk water supply project, AEV is acvely parcipang in various Public-Private Partnership (PPP) bids including the Laguna Lakeshore Project (the largest PPP project to date), and the LRT-2 operaons and maintenance contract.
. c n I , s e r u t n e V y t i u q E z i t i o b A
Representaves from Aboiz Equity Ventures and JV Angeles Construcon Corporaon sign the country’s largest bulk water supply deal with the Davao City Water District and the Davao City government, represented by Mayor Rodrigo Duterte.
In its connuing journey of supporng the naon’s long-term needs, the Aboiz Group will constantly be on the lookout for infrastructure investment opportunies.
Aseagas Corporaon was established to build plants that would produce renewable renewable energy from society’s organic waste. This energy yields fuel for motor vehicles and generates power from renewable biogas. By-products from biogas producon include carbon dioxide (CO2) and ferlizer. The company receives CDM (Clean Development Mechanism) credits from the reduced carbon emission resulng from the process. Its rst producon plant is located in Lian, Batangas and the original goal was to produce fuel in the form of liqueed bio-methane or bio-liqueed natural gas. However, the current global environment of lower fuel prices has made the fuel environment very challenging, thus the company is exploring the best use for for biogas. At this me, alternaves include pursuing power generaon and registering operaons under the feed-in-tari of the Department of Energy. Plant construcon has begun and compleon is expected by year-end 2015.
A strong performance by the company’s commercial unit is credited in part to The Outlets at Pueblo Verde, which achieved 100% occupancy within the rst six months of operaons.
56
t r o p e R l a u n n A
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57
Aboitiz Foundation
2014 Financial Highlights
Aboitiz Foundation, Inc.
• The Aboiz Group allocated a total of P610 million for CSR Projects. • Educaon received the biggest allocaon of P437 million, with the Foundaon spending P200 million for the rehabilitaon of schools in the Visayas.
Educaon 404,154
Aboitiz Group Initiatives*
Enterprise Development 29,511
2%
5%
Luzon 82,073
9%
5%
84%
67%
total Php483M
Environment 14,804
72%
Business Units’ (BU) Direct CSR Initiatives Program Component (in Php thousands)
Area
16% 16%
Luzon 154,792
. c n I , s e r u t n e V y t i u q E z i t i o b A
58
Visayas 356,675
*Aboitiz tiz Group Initiatives (Aboitiz Foundation + BUs Direct CSR)
25%
Educaon 32,811 Enterprise Development 4,959
58%
Health & Well-being and Other Donaons 83,000
Area
26%
4% 5%
Environment 5,965
Mindanao 98,638
total Php610M
17%
Mindanao 78,353
Health & Well-being and Other Donaons 45,825
2%
16%
Visayas 322,944
Environment 8,839
21%
Health & Well-being and Other Donaons 128,825
Area
Enterprise Development 24,552
Program Component (in Php thousands) Educaon 436,965
Program Component (in Php thousands)
Luzon 72,719
16%
Visayas 33,731 Mindanao 20,285
65%
total Php127M
27%
57% t r o p e R l a u n n A
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Aboitiz Foundation
2014 Financial Highlights
Aboitiz Foundation, Inc.
• The Aboiz Group allocated a total of P610 million for CSR Projects. • Educaon received the biggest allocaon of P437 million, with the Foundaon spending P200 million for the rehabilitaon of schools in the Visayas.
Educaon 404,154
Aboitiz Group Initiatives*
Luzon 82,073
9%
5%
84%
67%
total Php483M
Environment 14,804 Health & Well-being and Other Donaons 128,825
72%
Business Units’ (BU) Direct CSR Initiatives Program Component (in Php thousands)
Area
16% 16%
Luzon 154,792
. c n I , s e r u t n e V y t i u q E z i t i o b A
17%
Mindanao 78,353
Health & Well-being and Other Donaons 45,825
2%
16%
Visayas 322,944
Environment 8,839
21%
Enterprise Development 29,511
2%
5%
Area
Enterprise Development 24,552
Program Component (in Php thousands) Educaon 436,965
Program Component (in Php thousands)
25%
Visayas 356,675
Educaon 32,811
26%
Enterprise Development 4,959
4% 5%
Environment 5,965
Mindanao 98,638
total Php610M
58%
Health & Well-being and Other Donaons 83,000
Area Luzon 72,719
16%
Visayas 33,731 Mindanao 20,285
27%
57%
65%
t r o p e R l a u n n A
total Php127M
4 1 0 2
*Aboitiz tiz Group Initiatives (Aboitiz Foundation + BUs Direct CSR)
58
59
Aboitiz Foundation educaon-related educaon-related projects while a signicant number beneed from the health and well-being program. These included medical missions, installaon of water systems, and disaster relief operaons. The number of beneciaries was almost evenly spread across the country, country, with approximately approximately one-third each coming from Luzon, Visayas, and Mindanao. Achieving CSR 2.0 Since the late 1980s, the Aboiz Foundaon’s iniaves have evolved from a CSR 1.0, which involves simple philanthropic acvies, to more sustainable programs leading towards a CSR 2.0. The Foundaon is now undertaking bigger programs with longer-term benets, are of naonal scale with greater posive sustainable impact on beneciaries, those that are aligned to Aboiz businesses and encourage more parcipaon from team members.
Over half of the Foundaon’s beneciaries in 2014 were recipients of educaon-related projects such as school buildings, classrooms, and facilies that provide a beer learning environment.
Doing Well by Doing Good
In 2014, the Foundaon’s Foundaon’s annual budget increased to P483 million, with educaon-related educaon-related iniaves geng the biggest allocaon. A total of P200 million was spent on the rehabilitaon of schools in the Visayas in the aermath of Bohol earthquake and typhoon Yolanda.
Over the past 26 years since it was established, the Aboiz Foundaon has been commied to its mission of helping people help themselves. The Foundaon has shied the nature of its CSR intervenons from one-me donaons at the onset to carefullydesigned programs that empower beneciaries to pursue their aspiraons. It also partners with communies to promote inclusive growth through educaon and capability building programs.
. c n I , s e r u t n e V y t i u q E z i t i o b A
60
In doing so, the Foundaon aims to realize its vision to be the neighbor of choice among its stakeholders, stakeholders, including communies where Aboiz business operaons are located. In a 2014 reputaon survey, Aboiz team members, customers, suppliers, investors, media and host communies rated CSR as the most excellent among seven reputaon dimensions. This indicates a high appreciaon for the Foundaon’s eorts, and a high level of trust that it delivers on its stakeholders’ expectaons. In the past year, over 100,000 people beneed from the Foundaon’s programs. More than 50% were beneciaries of
Starng 2015, the Foundaon has carefully been selecng projects that would help reach its goal of achieving CSR 2.0. It is mapping out projects based on selected parameters, and establishing baseline and targets per business unit to determine the percentage of projects that are not yet under 2.0.
The total Aboiz Group CSR budget for 2014 reached P610 million — the biggest funds it has had so far—up by 26% from the previous year. The Group’s business units connued implemenng their own CSR projects, appropriang a total of P127 million.
Special science elementary schools and technical-vocaonal high schools are CSR 2.0 projects for naonwide implementaon.
The year 2014 tells a story of resilience among Filipinos as the naon united to help the Visayas get back on its feet aer typhoon Yolanda. This ‘bayanihan’ spirit moved the Foundaon to fulll its promise to rehabilitate more than 200 northern Cebu classrooms damaged by the typhoon, as part of the Aboiz #BangonVisayas relief and rehabilitaon program. With the overwhelming support of kind and generous donors, the program exceeded its target. In November
2014, the Foundaon formally turned over 272 classrooms—192 repaired and 80 newly constructed— to 34 schools in the towns of Bogo, Borbon, San Remigio, Daanbantayan, Daanbantayan, and Medellin beneng more than 18,000 students. This fullled promise was the culminaon of the Group’s Group’s #BangonVisayas eorts, which gave birth to Aboiz BeerWorld schools. Educaon Aboiz BeerWorld aims to provide a beer learning environment for communies with the establishment of special science elementary school (SSES) and technicalvocaonal (tech-voc) high schools. It also involves the construcon and repair of regular classrooms, donaon of AGAPP ‘Silid Pangarap’ classrooms, teacher skills training, integrated computerizaon, and scholarships for deserving students.
1,670 computers 833 classrooms client 979 thin systems
26,540 scholars In 2014, the Foundaon turned over 42 ‘Silid Pangarap’ classrooms built in partnership with the Aklat, Gabay, Aruga Tungo sa Pag-angat at Pag-asa (AGAPP) Foundaon. It also approved the construcon of 27 SSES and tech-voc classrooms, and supported 3,297 scholars across the country.
t r o p e R l a u n n A
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Aboitiz Foundation educaon-related educaon-related projects while a signicant number beneed from the health and well-being program. These included medical missions, installaon of water systems, and disaster relief operaons. The number of beneciaries was almost evenly spread across the country, country, with approximately approximately one-third each coming from Luzon, Visayas, and Mindanao. Achieving CSR 2.0 Since the late 1980s, the Aboiz Foundaon’s iniaves have evolved from a CSR 1.0, which involves simple philanthropic acvies, to more sustainable programs leading towards a CSR 2.0. The Foundaon is now undertaking bigger programs with longer-term benets, are of naonal scale with greater posive sustainable impact on beneciaries, those that are aligned to Aboiz businesses and encourage more parcipaon from team members.
Over half of the Foundaon’s beneciaries in 2014 were recipients of educaon-related projects such as school buildings, classrooms, and facilies that provide a beer learning environment.
Doing Well by Doing Good
In 2014, the Foundaon’s Foundaon’s annual budget increased to P483 million, with educaon-related educaon-related iniaves geng the biggest allocaon. A total of P200 million was spent on the rehabilitaon of schools in the Visayas in the aermath of Bohol earthquake and typhoon Yolanda.
Over the past 26 years since it was established, the Aboiz Foundaon has been commied to its mission of helping people help themselves. The Foundaon has shied the nature of its CSR intervenons from one-me donaons at the onset to carefullydesigned programs that empower beneciaries to pursue their aspiraons. It also partners with communies to promote inclusive growth through educaon and capability building programs.
. c n I , s e r u t n e V y t i u q E z i t i o b A
In doing so, the Foundaon aims to realize its vision to be the neighbor of choice among its stakeholders, stakeholders, including communies where Aboiz business operaons are located. In a 2014 reputaon survey, Aboiz team members, customers, suppliers, investors, media and host communies rated CSR as the most excellent among seven reputaon dimensions. This indicates a high appreciaon for the Foundaon’s eorts, and a high level of trust that it delivers on its stakeholders’ expectaons.
Starng 2015, the Foundaon has carefully been selecng projects that would help reach its goal of achieving CSR 2.0. It is mapping out projects based on selected parameters, and establishing baseline and targets per business unit to determine the percentage of projects that are not yet under 2.0.
The total Aboiz Group CSR budget for 2014 reached P610 million — the biggest funds it has had so far—up by 26% from the previous year. The Group’s business units connued implemenng their own CSR projects, appropriang a total of P127 million.
Special science elementary schools and technical-vocaonal high schools are CSR 2.0 projects for naonwide implementaon.
The year 2014 tells a story of resilience among Filipinos as the naon united to help the Visayas get back on its feet aer typhoon Yolanda. This ‘bayanihan’ spirit moved the Foundaon to fulll its promise to rehabilitate more than 200 northern Cebu classrooms damaged by the typhoon, as part of the Aboiz #BangonVisayas relief and rehabilitaon program. With the overwhelming support of kind and generous donors, the program exceeded its target. In November
In the past year, over 100,000 people beneed from the Foundaon’s programs. More than 50% were beneciaries of
2014, the Foundaon formally turned over 272 classrooms—192 repaired and 80 newly constructed— to 34 schools in the towns of Bogo, Borbon, San Remigio, Daanbantayan, Daanbantayan, and Medellin beneng more than 18,000 students. This fullled promise was the culminaon of the Group’s Group’s #BangonVisayas eorts, which gave birth to Aboiz BeerWorld schools. Educaon Aboiz BeerWorld aims to provide a beer learning environment for communies with the establishment of special science elementary school (SSES) and technicalvocaonal (tech-voc) high schools. It also involves the construcon and repair of regular classrooms, donaon of AGAPP ‘Silid Pangarap’ classrooms, teacher skills training, integrated computerizaon, and scholarships for deserving students.
1,670 computers 833 classrooms client 979 thin systems
26,540 scholars In 2014, the Foundaon turned over 42 ‘Silid Pangarap’ classrooms built in partnership with the Aklat, Gabay, Aruga Tungo sa Pag-angat at Pag-asa (AGAPP) Foundaon. It also approved the construcon of 27 SSES and tech-voc classrooms, and supported 3,297 scholars across the country.
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t r o p e R l a u n n A
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Aboitiz Foundation Environment For the environment, the Group achieved its 2015 target of planng 3 million trees one year ahead of schedule; by mid-2014, the enre Group had already planted 3.4 million trees. As a new challenge, it is pushing for a new target: 6 million more trees by 2020. In June 2014, 10 turtle nests which yielded 1,803 pawikan eggs were discovered on the beach at the Aboiz Cleanergy Park in Davao City. City. The park is truly becoming a nature and biodiversity haven haven as it was envisioned to be.
Health and Well-being Aboiz business units connue to extend community assistance, whenever needed. Medical, dental, and opcal missions conducted last year beneed more than 11,000 individuals throughout the country. They have also approved P5 million-worth of water system projects in 2014.
More than 18,000 students were brought back to the comfort and safety of their classrooms as the foundaon fullled its promise of rehabilitang 272 classrooms in North Cebu aer Yolanda.
To keep students abreast with technology, the Foundaon donated 36 stand-alone and 454 computer units under its thin cli ent system to various schools naonwide. These educaon-related iniaves amounted to P437 million or 72% of the Group’s total approved budget.
. c n I , s e r u t n e V y t i u q E z i t i o b A
Enterprise Development Community engagement is an essenal part of CSR that is why the Foundaon constantly empowers beneciaries in creang a beer future for themselves. Through the Aboiz Business Assistance and Guidance (ABAG) program, it assists small enterprising organizaons naonwide earn addional income by providing them access to livelihood opportunies, and capability building training.
In 2014, over P14-million worth of loan packages were granted to cooperaves. About P2.8 milli on was allocated for capability-building acvies and
livelihood skills training, which beneed over 1,000 would-be entrepreneurs.
Aboiz Foundaon promotes inclusive growth, which involves capability building programs and livelihood skills training that empower beneciaries to create a beer future for themselves.
As the Aboiz Foundaon moves towards the implementaon of CSR 2.0 iniaves, it will connue to create greater long-term value for its stakeholders. stakeholders. It will idenfy what are important to stakeholders, deliver on their high expectaons, collaborate with the public sector, build beer organizaon capability, and accurately measure CSR eecveness to address the gaps.
The Foundaon also gained re-accreditaon re-accreditaon from the Cooperave Cooperave Development Authority as a cered technical training provider, provider, allowing it to oer free technical trainings to more cooperaves across the country.
450 micronance loan packages
t r o p e R l a u n n A
worth P135 million
training 15 cooperative centers
4 1 0 Hawksbill turtle hatchlings swim for the rst me aer emerging from the marine turtle 2
sanctuary at the Aboiz Cleanergy Park in Davao City.
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Aboitiz Foundation Environment For the environment, the Group achieved its 2015 target of planng 3 million trees one year ahead of schedule; by mid-2014, the enre Group had already planted 3.4 million trees. As a new challenge, it is pushing for a new target: 6 million more trees by 2020. In June 2014, 10 turtle nests which yielded 1,803 pawikan eggs were discovered on the beach at the Aboiz Cleanergy Park in Davao City. City. The park is truly becoming a nature and biodiversity haven haven as it was envisioned to be.
Health and Well-being Aboiz business units connue to extend community assistance, whenever needed. Medical, dental, and opcal missions conducted last year beneed more than 11,000 individuals throughout the country. They have also approved P5 million-worth of water system projects in 2014.
More than 18,000 students were brought back to the comfort and safety of their classrooms as the foundaon fullled its promise of rehabilitang 272 classrooms in North Cebu aer Yolanda.
To keep students abreast with technology, the Foundaon donated 36 stand-alone and 454 computer units under its thin cli ent system to various schools naonwide. These educaon-related iniaves amounted to P437 million or 72% of the Group’s total approved budget.
. c n I , s e r u t n e V y t i u q E z i t i o b A
Enterprise Development Community engagement is an essenal part of CSR that is why the Foundaon constantly empowers beneciaries in creang a beer future for themselves. Through the Aboiz Business Assistance and Guidance (ABAG) program, it assists small enterprising organizaons naonwide earn addional income by providing them access to livelihood opportunies, and capability building training.
In 2014, over P14-million worth of loan packages were granted to cooperaves. About P2.8 milli on was allocated for capability-building acvies and
livelihood skills training, which beneed over 1,000 would-be entrepreneurs.
Aboiz Foundaon promotes inclusive growth, which involves capability building programs and livelihood skills training that empower beneciaries to create a beer future for themselves.
As the Aboiz Foundaon moves towards the implementaon of CSR 2.0 iniaves, it will connue to create greater long-term value for its stakeholders. stakeholders. It will idenfy what are important to stakeholders, deliver on their high expectaons, collaborate with the public sector, build beer organizaon capability, and accurately measure CSR eecveness to address the gaps.
The Foundaon also gained re-accreditaon re-accreditaon from the Cooperave Cooperave Development Authority as a cered technical training provider, provider, allowing it to oer free technical trainings to more cooperaves across the country.
450 micronance loan packages
t r o p e R l a u n n A
worth P135 million
training 15 cooperative centers
4 1 0 Hawksbill turtle hatchlings swim for the rst me aer emerging from the marine turtle 2
sanctuary at the Aboiz Cleanergy Park in Davao City.
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WeatherPhilippines Foundation Locaon of AWS deployed in the Philippines
Building a #WeatherWiser Nation In 2012, the Aboiz Group, in partnership with leading internaonal weather specialist, MeteoGroup, established WeatherPhilippines Foundaon to proacvely address the issue of disaster preparedness in a more sustainable way. The Aboiz Foundaon and UnionBank set up an inial fund of P125 million to start the foundaon, while MeteoGroup provided the technology for weather forecasng. In November 2013, typhoon Yolanda’s devastaon moved WeatherPhilippines to answer government’s call to help strengthen the country’s disaster risk reducon capability. It launched a campaign to build a #WeatherWiser Naon. The Foundaon aims to install 1,000 Automated Weather Staons (AWS) naonwide to complement government’s eorts in disaster risk reducon, and to prevent loss of lives and damage to property caused by adverse weather condions. Its website, weather. com.ph, provides accurate and localized weather informaon to the public. As of year-end 2014, 568 public and private partner organizaons enabled WeatherPhilippines to deploy a total of 750 AWS across the country. More than 860 disaster ocers were trained on how to install the AWS and how to access the website.
Strategic Pillars
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Technology, partnerships and communicaons are three key strategic pillars that keep WeatherPhilippines on track with achieving its vision to be the trusted and most reliable private weather organizaon in the country. Technology WeatherPhilippines’ technology partner MeteoGroup, provides the soware which processes data collected from the AWS, and posts localized forecasts at weather.com.ph.
Power source conguraons and data transmission capabilies have been improved by developing solar-
powered AWS for communies with minimal access to electricity. SMS-enabled data loggers that can transmit weather data to MeteoGroup’s systems despite Internet connecvity issues have also been added. Lightning detectors have been installed in the facilities of WeatherPhilippines’ partners like Cebu Pacific to ensure safer operations. These detectors enhance weather forecasting capabilities in localized thunderstorm scenarios. Out of the total 750 AWS already deployed naonwide, 47 units were installed in the Visayas to support government’s post-Yolanda iniaves. It was done in partnership with the Oce of the Presidenal Assistant for Rehabilitaon and Recovery (OPARR). In priority meteorological sites frequently visited by typhoons all across the country, 227 AWS have been deployed.
750 AWS
deployed nationwide
441 Luzon 186 Visayas 123 Mindanao
Partnerships WeatherPhilippines continuously strengthens and expands its partnerships with various organizations to sustain its operations and to implement initiatives in weather education and proactive disaster preparedness.
total
568 partners 5 Platinum Donors 18 Gold Donors 11 Service Partners 534 Site Partners
t r o p e R l a u n n A
WeatherPhilippines commits to partner with the Philippine Disaster Recovery Foundaon (PDRF) to strengthen the role of business in building the naon’s disaster preparedness, response and resiliency.
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WeatherPhilippines Foundation Locaon of AWS deployed in the Philippines
Building a #WeatherWiser Nation In 2012, the Aboiz Group, in partnership with leading internaonal weather specialist, MeteoGroup, established WeatherPhilippines Foundaon to proacvely address the issue of disaster preparedness in a more sustainable way. The Aboiz Foundaon and UnionBank set up an inial fund of P125 million to start the foundaon, while MeteoGroup provided the technology for weather forecasng. In November 2013, typhoon Yolanda’s devastaon moved WeatherPhilippines to answer government’s call to help strengthen the country’s disaster risk reducon capability. It launched a campaign to build a #WeatherWiser Naon. The Foundaon aims to install 1,000 Automated Weather Staons (AWS) naonwide to complement government’s eorts in disaster risk reducon, and to prevent loss of lives and damage to property caused by adverse weather condions. Its website, weather. com.ph, provides accurate and localized weather informaon to the public. As of year-end 2014, 568 public and private partner organizaons enabled WeatherPhilippines to deploy a total of 750 AWS across the country. More than 860 disaster ocers were trained on how to install the AWS and how to access the website.
Strategic Pillars
. c n I , s e r u t n e V y t i u q E z i t i o b A
Technology, partnerships and communicaons are three key strategic pillars that keep WeatherPhilippines on track with achieving its vision to be the trusted and most reliable private weather organizaon in the country. Technology WeatherPhilippines’ technology partner MeteoGroup, provides the soware which processes data collected from the AWS, and posts localized forecasts at weather.com.ph.
powered AWS for communies with minimal access to electricity. SMS-enabled data loggers that can transmit weather data to MeteoGroup’s systems despite Internet connecvity issues have also been added. Lightning detectors have been installed in the facilities of WeatherPhilippines’ partners like Cebu Pacific to ensure safer operations. These detectors enhance weather forecasting capabilities in localized thunderstorm scenarios. Out of the total 750 AWS already deployed naonwide, 47 units were installed in the Visayas to support government’s post-Yolanda iniaves. It was done in partnership with the Oce of the Presidenal Assistant for Rehabilitaon and Recovery (OPARR). In priority meteorological sites frequently visited by typhoons all across the country, 227 AWS have been deployed.
750 AWS
deployed nationwide
441 Luzon 186 Visayas 123 Mindanao
Partnerships WeatherPhilippines continuously strengthens and expands its partnerships with various organizations to sustain its operations and to implement initiatives in weather education and proactive disaster preparedness.
total
568 partners 5 Platinum Donors 18 Gold Donors 11 Service Partners 534 Site Partners
Power source conguraons and data transmission capabilies have been improved by developing solar-
t r o p e R l a u n n A
WeatherPhilippines commits to partner with the Philippine Disaster Recovery Foundaon (PDRF) to strengthen the role of business in building the naon’s disaster preparedness, response and resiliency.
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WeatherPhilippines Foundation
Sustainability
860 total number
435 total number of
WeatherPhilippines WeatherPhilippines looks forward forward to launching its new website and mobile applicaon in 2015.
Embedding Sustainability
of Disaster Risk
LGUs trained
#WeatherWiser Naon As the campaign to build a #WeatherWiser Naon deepens and widens in scope, WeatherPhilippines is developing a program that will have specic, measurable, and long-term engagement strategies with various stakeholders in the public and private sector. This program will highlight customized Weather 101 modules that will include storm tracking and simulaon exercises.
As one of the best-managed companies in the Philippines and in the region, Aboiz Equity Ventures touches the lives of millions through its major investments in power, banking, food, and land.
Reduction Ofcers
trained
170 provinces 240 cities 450 municipalities
80 provinces 128 cities 227 municipalities
Communicaons Aside from localized weather informaon, weather. com.ph provides a 5-day forecast, as well as naonal weather news and updates. It also has Weather TV, TV, and a Weather Diconary. Diconary. Updates are also available in its Facebook and Twier accounts.
WeatherPhilippines will also encourage current and future partners to use weather technology and Weather 101 trainings for strategic business planning, especially in the elds of agriculture, shing, tourism, and logiscs.
Severity Matrix WeatherPhilippines uses the severity matrix to simplify weather alerts and warnings issued during severe weather condions. This color-coded system is based on World Meteorological Organizaon (WMO) standards.
Sustainability is nothing new in the Aboiz Group. Even before this global advocacy was coined, sustainability pracces were already implemented in many of its business units. To enable the Group to create posive and lasng contribuons, it has forged a commitment to long-term sustainability—one that is anchored on the belief that it can do well by doing good. This means making the right long-term decisions that balance the interests of people, planet, and prot.
its 2014 Sustainability Report to demonstrate its strong adherence to corporate governance principles and transparency. This also allows the Group to focus on performance indicators that it deems crical and important to its business and key stakeholders. GRI is the globally accepted standard for corporate sustainability reporng used by more than 3,000 companies worldwide. In pursuing its vision to be a truly sustainable enterprise that can be entrusted to future generaons, Aboiz will connue to insll a mindset that it can do well by doing good, and always making the right long-term decisions that balance the interests of people, planet, and prot. This mindset is founded on the company’s core values of integrity, teamwork, innovaon, and responsibility, which drive its corporate culture.
Since embarking on its sustainability journey in 2009, Aboiz has been moving towards embedding its sustainability agenda throughout the organizaon. In 2013, the Group craed a sustainability policy and idened focus areas with the ulmate goal of looking beyond protability, and exploring beer ways to integrate social development and environmental stewardship into its business operaons. The path became clearer and more concrete in 2014 with the unveiling of the Aboiz BeerWorld campaign. Aboiz BeerWorld is a key step towards forging a deeper understanding of the Group’s sustainability agenda, gaining the commitment of all stakeholders, and rallying everyone behind making Aboiz a sustainable enterprise.
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66
The Group’s commitment was further strengthened in 2014, as metrics were developed to beer track the yearly sustainability performance of each and every business unit. This transion makes the Aboiz sustainability journey more concrete and aligns the implementaon of the Group’s sustainability iniaves to global best pracces. The Group adopted the latest Global Reporng Iniave (GRI) G4 Reporng Framework in preparing
In 2014, a team from Davao Light released a total of 1,301 hatchlings of the crically endagered Hawksbill species on the beaches of the Cleanergy Park in Punta Dumalag.
t r o p e R l a u n n A
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WeatherPhilippines Foundation
Sustainability
860 total number
435 total number of
WeatherPhilippines WeatherPhilippines looks forward forward to launching its new website and mobile applicaon in 2015.
Embedding Sustainability
of Disaster Risk
LGUs trained
#WeatherWiser Naon As the campaign to build a #WeatherWiser Naon deepens and widens in scope, WeatherPhilippines is developing a program that will have specic, measurable, and long-term engagement strategies with various stakeholders in the public and private sector. This program will highlight customized Weather 101 modules that will include storm tracking and simulaon exercises.
As one of the best-managed companies in the Philippines and in the region, Aboiz Equity Ventures touches the lives of millions through its major investments in power, banking, food, and land.
Reduction Ofcers
trained
170 provinces 240 cities 450 municipalities
80 provinces 128 cities 227 municipalities
Communicaons Aside from localized weather informaon, weather. com.ph provides a 5-day forecast, as well as naonal weather news and updates. It also has Weather TV, TV, and a Weather Diconary. Diconary. Updates are also available in its Facebook and Twier accounts.
WeatherPhilippines will also encourage current and future partners to use weather technology and Weather 101 trainings for strategic business planning, especially in the elds of agriculture, shing, tourism, and logiscs.
Severity Matrix WeatherPhilippines uses the severity matrix to simplify weather alerts and warnings issued during severe weather condions. This color-coded system is based on World Meteorological Organizaon (WMO) standards.
Sustainability is nothing new in the Aboiz Group. Even before this global advocacy was coined, sustainability pracces were already implemented in many of its business units. To enable the Group to create posive and lasng contribuons, it has forged a commitment to long-term sustainability—one that is anchored on the belief that it can do well by doing good. This means making the right long-term decisions that balance the interests of people, planet, and prot.
its 2014 Sustainability Report to demonstrate its strong adherence to corporate governance principles and transparency. This also allows the Group to focus on performance indicators that it deems crical and important to its business and key stakeholders. GRI is the globally accepted standard for corporate sustainability reporng used by more than 3,000 companies worldwide. In pursuing its vision to be a truly sustainable enterprise that can be entrusted to future generaons, Aboiz will connue to insll a mindset that it can do well by doing good, and always making the right long-term decisions that balance the interests of people, planet, and prot. This mindset is founded on the company’s core values of integrity, teamwork, innovaon, and responsibility, which drive its corporate culture.
Since embarking on its sustainability journey in 2009, Aboiz has been moving towards embedding its sustainability agenda throughout the organizaon. In 2013, the Group craed a sustainability policy and idened focus areas with the ulmate goal of looking beyond protability, and exploring beer ways to integrate social development and environmental stewardship into its business operaons. The path became clearer and more concrete in 2014 with the unveiling of the Aboiz BeerWorld campaign. Aboiz BeerWorld is a key step towards forging a deeper understanding of the Group’s sustainability agenda, gaining the commitment of all stakeholders, and rallying everyone behind making Aboiz a sustainable enterprise.
. c n I , s e r u t n e V y t i u q E z i t i o b A
The Group’s commitment was further strengthened in 2014, as metrics were developed to beer track the yearly sustainability performance of each and every business unit. This transion makes the Aboiz sustainability journey more concrete and aligns the implementaon of the Group’s sustainability iniaves to global best pracces.
In 2014, a team from Davao Light released a total of 1,301 hatchlings of the crically endagered Hawksbill species on the beaches of the Cleanergy Park in Punta Dumalag.
t r o p e R l a u n n A
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The Group adopted the latest Global Reporng Iniave (GRI) G4 Reporng Framework in preparing
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Sustainability Focus Areas and Metrics To drive sustainability throughout its business, Aboiz focuses on three key areas based on the triple boom line approach—people, planet, and prot—where it believes it can make the greatest dierence to the Group and its stakeholders. This framework is used to set targets, improve performance, and extend the scope of the value it creates.
Groupwide Sustainability Programs and Iniaves To rmly embed Aboiz BeerWorld into the organizaon, organizaon, the Group embarked on the following iniaves in 2014:
In 2014, professors professors from the University of the Philippines in Mindanao and the University of Southeastern Philippines conducted a scienc baseline research and biodiversity assessment to aid in the development of the Cleanergy Park.
Aboiz Cleanergy Park
Objecves
PEOPLE Goal: Partner with stakeholders to create shared value As a socially responsible organizaon, Aboiz focuses on delivering value to its stakeholders by being more responsive to their evolving needs: FOR TEAM MEMBERS: giving employment and ensuring their career growth within and outside the organizaon. FOR COMMUNITIES: entering into partnerships to make them sustainable and disaster-resilient. FOR CUSTOMERS: providing a commercially sustainable customer experience and ensuring that the company delivers on its promise.
PLANET Goal: Minimize the environmental impact of the business Being an industry leader comes with great responsibility. This is why Aboiz is commied to growing its business in a manner that takes into account the environmental impact of its commercial operaons. It aims to improve its energy eciency and emissions performance, and manage its impact on water and biodiversity. It also strives to provide reliable and reasonably-priced power while at the same me pursuing other renewable energy sources. . c n I , s e r u t n e V y t i u q E z i t i o b A
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PROFIT
Team Member Engagement & Development
Aract, retain, and opmize A-people
Corporate Social Responsibility
Partner with communies to promote inclusive growth
Disaster Resilience and Preparedness
Increase the capacity of local government and the public in disasterpreparedness
Customer Focus
Provide a commercially sustainablecustomer experience
Carbon Emissions Reducon
Resource Eciency
Waste Management
Renewable Energy (RE)
Reduce Greenhouse Gas (GHG) emissions across facilies under its control
Manage resources eciently
Reuse and recycle
forest, marine turtle habitat and nesng area, shoal, coral reefs, sea grasses, and a sh sanctuary declared as a marine protected area (MPA).
1,301
Total number of hatchlings released
During the year, Cleanergy Park also served as home to 10 turtle nests, which yielded 1,803 eggs of the crically endangered hawksbill turtle species. This was a signicant development as only one turtle nest has been discovered annually over the past years.
77% Average
Applying their newfound skills in turtle hatchery, a team from Davao Light was able to release 1,301 hatchlings (baby turtles).
hatching rate (Total number of eggs hatched divided by total number of eggs)
Funded by the Aboiz Foundaon, in partnership with Davao Light, the Aboiz Cleanergy Park is an eight-hectare private property developed as an outdoor biodiversity classroom to give the public the opportunity to explore and learn about nature. Located in Sio Punta Dumalag, Mana Aplaya in Davao City, the park hosts a rare and diverse ecosystem all in one place: a mangrove forest, forest, coastal
A-Park Program: 9 million trees by 2020 Since forging a commitment in 2010 to plant 3 million trees by 2015, in line with the United Naons Environment Program’s “Billion Tree Campaign,” AEV business units across the country have been planng trees in their respecve areas of operaons.
By 2014, the Group had already planted 3.4 million trees—almost one year ahead of schedule. This success emboldened the Group to plant 6 million more trees by 2020, or a total of 9 milli on trees by 2020.
Accumulated no. of trees planted ( groupwide)
Tap other RE sources and strengthen its renewable energy porolio with the development of more hydropower and geothermal capacity
9.0 million 3.4 million 2.9 million 2.7 million t r o p e R l a u n n A
Financial Return
Goal: Grow protably Looking aer the interest of shareholders, Aboiz aims to connually enhance its value by remaining ethical in its business pracces, scking to its core competencies, and execung dened strategies. It will explore expansion opportunies while managing its operaons well and prudently ulizing resources to achieve nancial growth and protability.
Grow protably Financial Growth
2003-2012
2013
2014
2020 Target
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Sustainability Focus Areas and Metrics To drive sustainability throughout its business, Aboiz focuses on three key areas based on the triple boom line approach—people, planet, and prot—where it believes it can make the greatest dierence to the Group and its stakeholders. This framework is used to set targets, improve performance, and extend the scope of the value it creates.
Groupwide Sustainability Programs and Iniaves To rmly embed Aboiz BeerWorld into the organizaon, organizaon, the Group embarked on the following iniaves in 2014:
In 2014, professors professors from the University of the Philippines in Mindanao and the University of Southeastern Philippines conducted a scienc baseline research and biodiversity assessment to aid in the development of the Cleanergy Park.
Aboiz Cleanergy Park
Objecves
PEOPLE Goal: Partner with stakeholders to create shared value As a socially responsible organizaon, Aboiz focuses on delivering value to its stakeholders by being more responsive to their evolving needs: FOR TEAM MEMBERS: giving employment and ensuring their career growth within and outside the organizaon. FOR COMMUNITIES: entering into partnerships to make them sustainable and disaster-resilient. FOR CUSTOMERS: providing a commercially sustainable customer experience and ensuring that the company delivers on its promise.
PLANET Goal: Minimize the environmental impact of the business Being an industry leader comes with great responsibility. This is why Aboiz is commied to growing its business in a manner that takes into account the environmental impact of its commercial operaons. It aims to improve its energy eciency and emissions performance, and manage its impact on water and biodiversity. It also strives to provide reliable and reasonably-priced power while at the same me pursuing other renewable energy sources. . c n I , s e r u t n e V y t i u q E z i t i o b A
PROFIT
Team Member Engagement & Development
Aract, retain, and opmize A-people
Corporate Social Responsibility
Partner with communies to promote inclusive growth
Disaster Resilience and Preparedness
Increase the capacity of local government and the public in disasterpreparedness
Customer Focus
Provide a commercially sustainablecustomer experience
Carbon Emissions Reducon
Resource Eciency
Waste Management
Renewable Energy (RE)
Reduce Greenhouse Gas (GHG) emissions across facilies under its control
Manage resources eciently
1,301
Total number of hatchlings released
During the year, Cleanergy Park also served as home to 10 turtle nests, which yielded 1,803 eggs of the crically endangered hawksbill turtle species. This was a signicant development as only one turtle nest has been discovered annually over the past years.
77% Average
Applying their newfound skills in turtle hatchery, a team from Davao Light was able to release 1,301 hatchlings (baby turtles).
hatching rate (Total number of eggs hatched divided by total number of eggs)
Funded by the Aboiz Foundaon, in partnership with Davao Light, the Aboiz Cleanergy Park is an eight-hectare private property developed as an outdoor biodiversity classroom to give the public the opportunity to explore and learn about nature. Located in Sio Punta Dumalag, Mana Aplaya in Davao City, the park hosts a rare and diverse ecosystem all in one place: a mangrove forest, forest, coastal
Reuse and recycle
forest, marine turtle habitat and nesng area, shoal, coral reefs, sea grasses, and a sh sanctuary declared as a marine protected area (MPA).
A-Park Program: 9 million trees by 2020 Since forging a commitment in 2010 to plant 3 million trees by 2015, in line with the United Naons Environment Program’s “Billion Tree Campaign,” AEV business units across the country have been planng trees in their respecve areas of operaons.
By 2014, the Group had already planted 3.4 million trees—almost one year ahead of schedule. This success emboldened the Group to plant 6 million more trees by 2020, or a total of 9 milli on trees by 2020.
Accumulated no. of trees planted ( groupwide)
Tap other RE sources and strengthen its renewable energy porolio with the development of more hydropower and geothermal capacity
9.0 million 3.4 million 2.9 million 2.7 million t r o p e R l a u n n A
Financial Return
Goal: Grow protably Looking aer the interest of shareholders, Aboiz aims to connually enhance its value by remaining ethical in its business pracces, scking to its core competencies, and execung dened strategies. It will explore expansion opportunies while managing its operaons well and prudently ulizing resources to achieve nancial growth and protability.
Grow protably Financial Growth
2003-2012
2013
2014
2020 Target
68
4 1 0 2
69
Sustainability Race to Reduce Program The Race to Reduce (R2R) Program underpins the Group’s commitment to the ecient use of enterprise resources.
and college students, partner organizaons, and Interrupble Load Program Program (ILP) partners. The aim was to encourage the stakeholders to get involved in the advocacy.
To make a collecve impact, the program aims to enroll all facilies across the Group.
Phase 2 involved the celebraon of the support generated from these stakeholders. An evening of recognion was held for the ILP partners and a morning caravan of acvies with the Boy Scouts.
In 2014, there were 268 enrolled facilies compared to 2013.
No. of Enrolled Facilies
268
total of enrolled facilities
Energy Consumpon in mWh
271,746 mWh 2013
332,892 mWh 2014
Water Consumpon in cu.m.
832,945 cu.m. 687,135 cu.m. 2013
Phase 3 was a door-to-door campaign where yers, yers, solar alarm, and refrigerator magnets were distributed to remind cizens of the 8 simpl e ways to conserve energy. Wealth on Waste Program This program aims to creavely recycle waste materials aer its useful life. It has been able to turn individual refuse into everyday items that help the communies and the environment. environment. 3rd Green Fashion Revoluon
Aside from showcasing talent and creavity in fashion design, the compeon also aims to raise public awareness on the importance of the 3Rs (reduce, reuse, and recycle), as the young parcipants are made to propose environmental intervenon programs for their respecve barangays. barangays.
70
Biogas Plant Generation, Purchased Electricity
40% Savings
2.4
44% Savings
2.3 1.5
1.8
Cebu Unplugged promotes 8 simple ways one can conserve energy and reduce Cebu’s carbon footprint through the promoon of responsible energy use. Under the Aboiz Group’s Wealth on Waste Program, projects like the Green Fashion Revoluon help to raise awareness on the 3Rs—reduce, reuse, recycle—among the youth.
It will serve as backyard integraon integraon for those who already have have exisng businesses. It will also provide livelihood to out-of-town entrepreneurs as the producon units are best in areas where prices of eggs are high. Aside from egg machines, the new entrepreneurs entrepreneurs will be provided with both technical and social trainings so they can sustain their business longer and thus, connuously grow their prots. Capability Building Program Project TeACH
CitySavings, together with the Coalion for Beer Educaon (CBE) and the Department of Educaon (DepEd), launched Project “Teach, Aspire, Challenge, Help (TeACH)” in October 2013. The project aims to enhance the skills of public teachers with the introducon of new methodologies and approaches in classroom teaching. In 2014, the rst batch of 25 teachers from 25 public schools in the Naonal Capital Region (NCR) graduated and completed the course. They may have their trainings used as basis for potenal promoon under DepEd. Weather 101 and Tropical Cyclone 101 Training
2013
Biogas Producon, kWh
2014
Purchased Electricity, Electricity, kWh
Enterprise Development Pilmico’s Mahalin Pagkaing An Program Mahalin Pagkaing An is a campaign launched by Pilmico in partnership with Terra Firma and the local government of Leyte. Leyte. It aims to promote sustainable entrepreneurship entrepreneurship through the promoon of locally grown produce and insll “a pride of product, pride of place” mindset for both the farmers and local consumers.
VECO’s Cebu Unplugged
Cebu Unplugged is an energy conservaon campaign spearheaded by Visayan Electric Company, Inc. (VECO) to pave the way for a greener and sustainable environment for for future generaons. generaons. It aims to spread awareness, create advocacies, and become an inuence to other provinces.
Phase 1 of the campaign involved discussions with stakeholders: stakeholders: local government units, high school
Pilmico Biogas Project
Pilmico Feeds in Tarlac has converted waste materials from its swine operaons into energy for its farm facilies. It started to incur a 37% savings in 2011 to 44% savings in 2014.
This annual fashion design compeon organized by the Group challenges students of Metro Cebu colleges and universies to create clothing, footwear, and accessories made from recyclable materials.
2014
. c n I , s e r u t n e V y t i u q E z i t i o b A
On the third year of the compeon held on October 18, 2014 at the SM City Cebu Trade Hall, a team from the University of the Philippines Cebu emerged as the overall winner. The team proposed a livelihood program for Barangay Camputhaw, which involved making woven products out of used tarpaulins and other recyclable materials.
The campaign kicked o with the distribuon of 100 egg machines in Leyte. This promotes the ecient producon of table eggs and provides their immediate consumers (neighbors) with fresh and clean produce.
WeatherPhilippines conducted Weather 101 and Tropical Cyclone 101 trainings for private organizations to increase people’s knowledge on timely response to adverse climate changes. A number of trainings were also held for partners including VECO, Davao Light, SNAP Group, AboitizPower, the Rotary Club of Cebu, and Center for Disaster Emergency Response. These initiatives strengthened two significant areas for WeatherPhilippines: stronger communication communication of its message on proactive proactive disaster preparedness, and better community engagement among its partners in the public and private sectors. GHG Inventory and Resource Eciency Training
To heighten awareness on the ecient management of crical resources such as water
t r o p e R l a u n n A
4 1 0 2
71
Sustainability Race to Reduce Program The Race to Reduce (R2R) Program underpins the Group’s commitment to the ecient use of enterprise resources.
and college students, partner organizaons, and Interrupble Load Program Program (ILP) partners. The aim was to encourage the stakeholders to get involved in the advocacy.
To make a collecve impact, the program aims to enroll all facilies across the Group.
Phase 2 involved the celebraon of the support generated from these stakeholders. An evening of recognion was held for the ILP partners and a morning caravan of acvies with the Boy Scouts.
In 2014, there were 268 enrolled facilies compared to 2013.
No. of Enrolled Facilies
268
total of enrolled facilities
Energy Consumpon in mWh
271,746 mWh 2013
332,892 mWh 2014
Water Consumpon in cu.m.
832,945 cu.m. 687,135 cu.m. 2013
Phase 3 was a door-to-door campaign where yers, yers, solar alarm, and refrigerator magnets were distributed to remind cizens of the 8 simpl e ways to conserve energy. Wealth on Waste Program This program aims to creavely recycle waste materials aer its useful life. It has been able to turn individual refuse into everyday items that help the communies and the environment. environment. 3rd Green Fashion Revoluon
Aside from showcasing talent and creavity in fashion design, the compeon also aims to raise public awareness on the importance of the 3Rs (reduce, reuse, and recycle), as the young parcipants are made to propose environmental intervenon programs for their respecve barangays. barangays.
40%
44% Savings
Savings
2.4
2.3 1.8
1.5
Cebu Unplugged promotes 8 simple ways one can conserve energy and reduce Cebu’s carbon footprint through the promoon of responsible energy use. Under the Aboiz Group’s Wealth on Waste Program, projects like the Green Fashion Revoluon help to raise awareness on the 3Rs—reduce, reuse, recycle—among the youth.
It will serve as backyard integraon integraon for those who already have have exisng businesses. It will also provide livelihood to out-of-town entrepreneurs as the producon units are best in areas where prices of eggs are high. Aside from egg machines, the new entrepreneurs entrepreneurs will be provided with both technical and social trainings so they can sustain their business longer and thus, connuously grow their prots. Capability Building Program Project TeACH
CitySavings, together with the Coalion for Beer Educaon (CBE) and the Department of Educaon (DepEd), launched Project “Teach, Aspire, Challenge, Help (TeACH)” in October 2013. The project aims to enhance the skills of public teachers with the introducon of new methodologies and approaches in classroom teaching.
Biogas Plant Generation, Purchased Electricity
In 2014, the rst batch of 25 teachers from 25 public schools in the Naonal Capital Region (NCR) graduated and completed the course. They may have their trainings used as basis for potenal promoon under DepEd. Weather 101 and Tropical Cyclone 101 Training
2013
2014
Purchased Electricity, Electricity, kWh
Biogas Producon, kWh
Enterprise Development Pilmico’s Mahalin Pagkaing An Program Mahalin Pagkaing An is a campaign launched by Pilmico in partnership with Terra Firma and the local government of Leyte. Leyte. It aims to promote sustainable entrepreneurship entrepreneurship through the promoon of locally grown produce and insll “a pride of product, pride of place” mindset for both the farmers and local consumers.
VECO’s Cebu Unplugged
Cebu Unplugged is an energy conservaon campaign spearheaded by Visayan Electric Company, Inc. (VECO) to pave the way for a greener and sustainable environment for for future generaons. generaons. It aims to spread awareness, create advocacies, and become an inuence to other provinces.
Phase 1 of the campaign involved discussions with stakeholders: stakeholders: local government units, high school
Pilmico Biogas Project
Pilmico Feeds in Tarlac has converted waste materials from its swine operaons into energy for its farm facilies. It started to incur a 37% savings in 2011 to 44% savings in 2014.
This annual fashion design compeon organized by the Group challenges students of Metro Cebu colleges and universies to create clothing, footwear, and accessories made from recyclable materials.
2014
. c n I , s e r u t n e V y t i u q E z i t i o b A
On the third year of the compeon held on October 18, 2014 at the SM City Cebu Trade Hall, a team from the University of the Philippines Cebu emerged as the overall winner. The team proposed a livelihood program for Barangay Camputhaw, which involved making woven products out of used tarpaulins and other recyclable materials.
The campaign kicked o with the distribuon of 100 egg machines in Leyte. This promotes the ecient producon of table eggs and provides their immediate consumers (neighbors) with fresh and clean produce.
WeatherPhilippines conducted Weather 101 and Tropical Cyclone 101 trainings for private organizations to increase people’s knowledge on timely response to adverse climate changes. A number of trainings were also held for partners including VECO, Davao Light, SNAP Group, AboitizPower, the Rotary Club of Cebu, and Center for Disaster Emergency Response. These initiatives strengthened two significant areas for WeatherPhilippines: stronger communication communication of its message on proactive proactive disaster preparedness, and better community engagement among its partners in the public and private sectors. GHG Inventory and Resource Eciency Training
To heighten awareness on the ecient management of crical resources such as water
70
and energy, which have a signicant impact on businesses in the coming years, the Group conducted a technical training on greenhouse gases (GHG) inventory and management, and resource eciency at the Bonifacio Global City in Taguig City. Thirty-ve sustainability stewards, polluon control ocers, and facility ocers from various Aboiz business units learned the necessary tools to compute and manage greenhouse emissions and formulate management plans for water, water, energy, and waste.
Providing Stakeholder Value for beneciaries and also more aligned to its businesses.
More than just being a successful enterprise, Aboiz Equity Ventures (AEV) and its busi ness units are commied towards constantly striking a triple balance of people, planet, and prot.
To amplify the impact of its sustainability iniaves, Aboiz will also embark on more partnerships, stakeholder stakeholder engagement i niaves, and capacity building. These involve:
In its core businesses of power, banking, food, and land, the organizaon and its team members serve countless people during the daily course of operaons across the country. They all share a goal to touch and enrich lives, help stakeholders aain a beer future, and collecvely care for the one planet that sustains us all.
conceptualize and idenfy viable • Connuing to conceptualize
2015 Plans
•
•
Aboiz Foundaon and Davao Light developed the Cleanergy Park as an outdoor biodiversity classroom to give the public the opportunity to explore and learn about nature.
72
4 1 0 2
71
Sustainability
. c n I , s e r u t n e V y t i u q E z i t i o b A
t r o p e R l a u n n A
Moving forward, Aboiz will connue to execute its sustainability iniaves while remaining focused on its four strategic pillars: to grow and expand its business, increase stakeholder engagement, build human capital, and carry on execuon excellence in everything it does. Emboldened by the outstanding rangs Aboiz earned in a 2014 reputaon survey among key stakeholders, notably in the area of corporate social responsibility (CSR) where it was rated “most excellent,” the Group will now work towards achieving CSR 2.0 in its programs. This entails moving away from CSR 1.0, which involves simple philanthropic acvies, and shiing to engaging projects that are more sustainable
•
•
•
programs to minimize its environmental environmental impact. The Group will pursue its l ong-term commitment to plant another 6 milli on trees naonwide, develop the 8-hectare outdoor biodiversity Cleanergy Park in Davao City, and expand to other areas of operaon. Projects that address the health and well-being of local communies, including fund drives for disaster relief and rehabilitaon eorts, will also be connued; Connuing to establish and develop Aboiz BeerWorld BeerWorld schools to achieve the goal of providing universal public educaon. This means more special science elementary schools, technical-vocaonal technical-vocaonal high schools, AGAPP Silid Pangarap donaons, and regular Foundaon classrooms, scholarships, and teacher skills trainings for the public school system; Expanding the micronance base and training organized groups outside Cebu to improve community livelihood and employment opportunies; Conducng the annual Aboiz Future Leaders’ Business Summit (AFLBS), parcipated by the brightest college student leaders all over the country, country, to further develop their leadership skills and learn how to concreze management management concepts in a corporate environment; environment; Training local governments governments on the basics of weather and tropical cyclones so they can apply their knowledge to improve their communies’ tourism, agriculture and sheries, and local economy; and Idenfying viable projects that will involve more team member parcipaon and engaging stakeholders stakeholders more closely through the use of social media and other possible channels of communicaon.
The Group is commied to making Aboiz a truly sustainable enterprise that can be entrusted to future generaons.
Stakeholder
Power
Food
Provide employment
Team Members
Help people help themselves through Corporate Social Responsibility (CSR)
Community
Deliver beer goods and services
Customers
Pay for goods and services
Suppliers
Pay taxes
Government
Compliance to environment and regulatory requirements
Regulators
Invest for expansion & growth
General Public
Pay dividends
Shareholders
Banking
Land
2015 Capital Expenditures
t r o p e R l a u n n A
4 1 0 2
73
Sustainability and energy, which have a signicant impact on businesses in the coming years, the Group conducted a technical training on greenhouse gases (GHG) inventory and management, and resource eciency at the Bonifacio Global City in Taguig City. Thirty-ve sustainability stewards, polluon control ocers, and facility ocers from various Aboiz business units learned the necessary tools to compute and manage greenhouse emissions and formulate management plans for water, water, energy, and waste.
Providing Stakeholder Value for beneciaries and also more aligned to its businesses.
More than just being a successful enterprise, Aboiz Equity Ventures (AEV) and its busi ness units are commied towards constantly striking a triple balance of people, planet, and prot.
To amplify the impact of its sustainability iniaves, Aboiz will also embark on more partnerships, stakeholder stakeholder engagement i niaves, and capacity building. These involve:
In its core businesses of power, banking, food, and land, the organizaon and its team members serve countless people during the daily course of operaons across the country. They all share a goal to touch and enrich lives, help stakeholders aain a beer future, and collecvely care for the one planet that sustains us all.
conceptualize and idenfy viable • Connuing to conceptualize
2015 Plans
•
•
Aboiz Foundaon and Davao Light developed the Cleanergy Park as an outdoor biodiversity classroom to give the public the opportunity to explore and learn about nature.
. c n I , s e r u t n e V y t i u q E z i t i o b A
Moving forward, Aboiz will connue to execute its sustainability iniaves while remaining focused on its four strategic pillars: to grow and expand its business, increase stakeholder engagement, build human capital, and carry on execuon excellence in everything it does. Emboldened by the outstanding rangs Aboiz earned in a 2014 reputaon survey among key stakeholders, notably in the area of corporate social responsibility (CSR) where it was rated “most excellent,” the Group will now work towards achieving CSR 2.0 in its programs. This entails moving away from CSR 1.0, which involves simple philanthropic acvies, and shiing to engaging projects that are more sustainable
•
•
•
programs to minimize its environmental environmental impact. The Group will pursue its l ong-term commitment to plant another 6 milli on trees naonwide, develop the 8-hectare outdoor biodiversity Cleanergy Park in Davao City, and expand to other areas of operaon. Projects that address the health and well-being of local communies, including fund drives for disaster relief and rehabilitaon eorts, will also be connued; Connuing to establish and develop Aboiz BeerWorld BeerWorld schools to achieve the goal of providing universal public educaon. This means more special science elementary schools, technical-vocaonal technical-vocaonal high schools, AGAPP Silid Pangarap donaons, and regular Foundaon classrooms, scholarships, and teacher skills trainings for the public school system; Expanding the micronance base and training organized groups outside Cebu to improve community livelihood and employment opportunies; Conducng the annual Aboiz Future Leaders’ Business Summit (AFLBS), parcipated by the brightest college student leaders all over the country, country, to further develop their leadership skills and learn how to concreze management management concepts in a corporate environment; environment; Training local governments governments on the basics of weather and tropical cyclones so they can apply their knowledge to improve their communies’ tourism, agriculture and sheries, and local economy; and Idenfying viable projects that will involve more team member parcipaon and engaging stakeholders stakeholders more closely through the use of social media and other possible channels of communicaon.
The Group is commied to making Aboiz a truly sustainable enterprise that can be entrusted to future generaons.
Stakeholder
Power
Food
Provide employment
Team Members
Help people help themselves through Corporate Social Responsibility (CSR)
Community
Deliver beer goods and services
Customers
Pay for goods and services
Suppliers
Pay taxes
Government
Compliance to environment and regulatory requirements
Regulators
Invest for expansion & growth
General Public
Pay dividends
Shareholders
Banking
Land
2015 Capital Expenditures
t r o p e R l a u n n A
4 1 0 2
72
73
Corporate Governance Corporate Goverance, a Corporate Compass The Aboiz Way is an all-encompassing corporate corporate governance mindset that recognizes and believes in: • The disnctly unique Aboiz way of doing things; • Constantly nurturing the Aboiz passion for beer ways; • Being driven: driven to lead, driven to excel, excel, and driven to serve; • Being guided by core values of integrity, teamwork, innovaon, responsibility; • Creang long-term value for all stakeholders; • Giving value to fellow team members and celebrang everyone’s successes; • Leading by example, mentoring and fostering teamwork, creang a work environment that fosters speaking out, and delivering results for sustainable growth; and • Sustainability as being the core of the Company’s vision for the future.
The Aboiz Group and its management team believe that there is only one way to realize this vision: through the connuous adopon of corporate governance best pracces encapsulated in the Aboiz Way. It is believing that the Company can do well by doing good. The Aboiz Way is the Group’s corporate compass. The mission of Aboiz Equity Ventures, Inc. (AEV) is to create long-term value for all its stakeholders. To pursue this mission, the company is guided by four strategic pillars: (1) grow the business; (2) stakeholder engagement, (3) execuon excellence; and (4) build human capital. AEV’s strategic focus areas revolve around growing the business, engaging stakeholders more closely, creang a deep pool of best-in-class team members to plug succession and competency gaps, and execung bestin-class processes to achieve compeve edge while adhering to sustainability principles and pracces that make sense to all stakeholders. . c n I , s e r u t n e V y t i u q E z i t i o b A
74
In 2014, AEV ’s Board and its management team reviewed these four strategic pillars and reiterated their relevance to the company’s business roadmap for the future. As a result of the major strategic planning and refresh in 2014, AEV has now added a h l eg –infrastructure– to its core businesses alongside power, banking, land, and food. Aboiz Power Corporaon (AboizPower) and its business units are also aligned to AEV Corporate Center’s strategic pillars. AboizPower’s vision is A Beer
Future and its mission is To nd Beer Soluons. The company’s corporate brand aributes are pro-acve, expert, and responsible. AboizPower considers the following as its responsibilies: to provide reliable and ample power supply needed by the country; to ensure that supply of electricity is provided at a reasonable and compeve price, and with the least adverse eect on the environment and communies. AboizPower is passionate about achieving its vision and goals. The company has been constantly striving to be the best at operaons, maintenance, capacity and supply opmizaon, as well as project execuon. With the goal of becoming a world-class organizaon, AboizPower has set its goals to creang a good-to-great organizaon organizaon with policies and standards that promote cost eciency and steady growth, with service levels that improve stakeholderengagement. AEV and AboizPower are proud of the health, safety, and environmental track record of their businesses. This is clear and measurable proof that businesses can be aligned both to the principles of sustainability and good economic sense. 2014 posed many challenges to the Aboiz Group, but it has shown resilience to dynamic business condions as well as to the changing or shiing regulatory environment. The Boards of AEV and AboizPower ensured that they were kept abreast of developments and challenges in the businesses and guided Management accordingly. With the full support of the management teams, AEV
and AboizPower set and pursued their 2014 strategic goals and business objecves without losing sight of the corporate compass, the companies’ corporate governance pracces. The respecve Boards worked relessly to ensure accountability of past company acons through review of reports to shareholders, legal and regulatory compliance reports, audit reports, nancial results and budgets, and contemporaneous events that aect the business of AEV and AboizPower.
Aboiz Corporate Governance Guiding Principles The Aboiz governance structure is grounded on its core values of integrity, teamwork, innovaon, and responsibilty. These values, together with the Group’s brand aributes of being driven, driven to lead, driven to excel, and driven to serve, provide a compass for meeng challenges in the business landscape and in sasfying various stakeholder interests and claims. These core values, aributes, vision, and missi on constute the Aboiz DNA. More importantly, these values provide the glue that gives i ntegrity to the organizaon’s corporate governancestructure. The Aboiz Group connues to believe in and adopt the following core principles and pracces: (i) the Company’s personality is independent from that of its Board, ocers and employees; (ii) the Company has its own disnct rights and dues; (iii) the Board has the original power to decide on the Company’s policies; (iv) the Company can demand loyalty from its Board, ocers and employees; (v) the Company’s business must be pursued through a long-term sustainability strategy; (vi) shareholders and stakeholders must be treated equitably and with fairness; (vii) a system of accountability; (viii) transparency in corporate operaons and company reports; (ix) an ethical business; (x) corporate social responsibility (CSR); and most importantly, (xi) sustainability and environmental compliance. In 2014, AEV and AboizPower Boards also worked on refreshing and strengthening the roles and responsibilies of the Boards of Directors. Together with the Management team, they worked to preserve and modify (or adopt where needed) protocols, systems, and policies. These are i ntended to preserve and protect the rights of shareholders, to ensure shareholders’ equitable treatment by the companies, to enhance the stakeholder value, to promote connuous improvement
of stakeholders engagement, engagement, and to make mely and responsive corporate disclosures balanced with the requirements for condenality in a compeve business environment. environment.
Responsibilies of the Board The Boards of Directors under the Aboiz Group are fully engaged Boards, composed of highly professional members and working under environments of respect and collegiality, where candidness and robust discussions are not only encouraged, but are the norm. The AEV and AboizPower Boards are each composed of three independent directors, and independentminded execuve and non-execuve members who have diverse professional backgrounds, such as economics, corporate nance, engineering, accounng, audit, chief execuve and chief operaons experience, investment banking, private, government sector and mullateral agencies sector, as well as experience in policy-making bodies. These directors lend their in-depth experience and experse to the Board and the Management team in all relevant maers aecng the Aboiz Group. AEV and AboizPower are connually reviewing the roles and responsibilies of their Boards to assess the propriety and value of exisng and proposed Board and Board Commiee protocols, systems and policies. All directors have been carefully selected, nominated, and elected based on their credenals as well as their ability to contribute and share their experse in all relevant maers aecng the business units of AEV and AboizPower. The exisng company policies of AEV and AboizPower such as those found in the By-Laws, the Amended Manual of Corporate Governance, the Code of Ethics and Business Conduct, Board protocols, other Board secretariat guidelines, and the Aboiz Informaon Management System protocols, ensure excellence in the performance of the directors’ roles and responsibilies. The Independent Directors of both AEV and AboizPower worked closely with the internal audit team in the performance of their funcons as members of the Board Audit Commiee.
t r o p e R l a u n n A
4 1 0 2
75
Corporate Governance Corporate Goverance, a Corporate Compass The Aboiz Way is an all-encompassing corporate corporate governance mindset that recognizes and believes in: • The disnctly unique Aboiz way of doing things; • Constantly nurturing the Aboiz passion for beer ways; • Being driven: driven to lead, driven to excel, excel, and driven to serve; • Being guided by core values of integrity, teamwork, innovaon, responsibility; • Creang long-term value for all stakeholders; • Giving value to fellow team members and celebrang everyone’s successes; • Leading by example, mentoring and fostering teamwork, creang a work environment that fosters speaking out, and delivering results for sustainable growth; and • Sustainability as being the core of the Company’s vision for the future.
The Aboiz Group and its management team believe that there is only one way to realize this vision: through the connuous adopon of corporate governance best pracces encapsulated in the Aboiz Way. It is believing that the Company can do well by doing good. The Aboiz Way is the Group’s corporate compass. The mission of Aboiz Equity Ventures, Inc. (AEV) is to create long-term value for all its stakeholders. To pursue this mission, the company is guided by four strategic pillars: (1) grow the business; (2) stakeholder engagement, (3) execuon excellence; and (4) build human capital. AEV’s strategic focus areas revolve around growing the business, engaging stakeholders more closely, creang a deep pool of best-in-class team members to plug succession and competency gaps, and execung bestin-class processes to achieve compeve edge while adhering to sustainability principles and pracces that make sense to all stakeholders. . c n I , s e r u t n e V y t i u q E z i t i o b A
In 2014, AEV ’s Board and its management team reviewed these four strategic pillars and reiterated their relevance to the company’s business roadmap for the future. As a result of the major strategic planning and refresh in 2014, AEV has now added a h l eg –infrastructure– to its core businesses alongside power, banking, land, and food. Aboiz Power Corporaon (AboizPower) and its business units are also aligned to AEV Corporate Center’s strategic pillars. AboizPower’s vision is A Beer
Future and its mission is To nd Beer Soluons. The company’s corporate brand aributes are pro-acve, expert, and responsible. AboizPower considers the following as its responsibilies: to provide reliable and ample power supply needed by the country; to ensure that supply of electricity is provided at a reasonable and compeve price, and with the least adverse eect on the environment and communies. AboizPower is passionate about achieving its vision and goals. The company has been constantly striving to be the best at operaons, maintenance, capacity and supply opmizaon, as well as project execuon. With the goal of becoming a world-class organizaon, AboizPower has set its goals to creang a good-to-great organizaon organizaon with policies and standards that promote cost eciency and steady growth, with service levels that improve stakeholderengagement. AEV and AboizPower are proud of the health, safety, and environmental track record of their businesses. This is clear and measurable proof that businesses can be aligned both to the principles of sustainability and good economic sense. 2014 posed many challenges to the Aboiz Group, but it has shown resilience to dynamic business condions as well as to the changing or shiing regulatory environment. The Boards of AEV and AboizPower ensured that they were kept abreast of developments and challenges in the businesses and guided Management accordingly. With the full support of the management teams, AEV
and AboizPower set and pursued their 2014 strategic goals and business objecves without losing sight of the corporate compass, the companies’ corporate governance pracces. The respecve Boards worked relessly to ensure accountability of past company acons through review of reports to shareholders, legal and regulatory compliance reports, audit reports, nancial results and budgets, and contemporaneous events that aect the business of AEV and AboizPower.
Aboiz Corporate Governance Guiding Principles The Aboiz governance structure is grounded on its core values of integrity, teamwork, innovaon, and responsibilty. These values, together with the Group’s brand aributes of being driven, driven to lead, driven to excel, and driven to serve, provide a compass for meeng challenges in the business landscape and in sasfying various stakeholder interests and claims. These core values, aributes, vision, and missi on constute the Aboiz DNA. More importantly, these values provide the glue that gives i ntegrity to the organizaon’s corporate governancestructure. The Aboiz Group connues to believe in and adopt the following core principles and pracces: (i) the Company’s personality is independent from that of its Board, ocers and employees; (ii) the Company has its own disnct rights and dues; (iii) the Board has the original power to decide on the Company’s policies; (iv) the Company can demand loyalty from its Board, ocers and employees; (v) the Company’s business must be pursued through a long-term sustainability strategy; (vi) shareholders and stakeholders must be treated equitably and with fairness; (vii) a system of accountability; (viii) transparency in corporate operaons and company reports; (ix) an ethical business; (x) corporate social responsibility (CSR); and most importantly, (xi) sustainability and environmental compliance. In 2014, AEV and AboizPower Boards also worked on refreshing and strengthening the roles and responsibilies of the Boards of Directors. Together with the Management team, they worked to preserve and modify (or adopt where needed) protocols, systems, and policies. These are i ntended to preserve and protect the rights of shareholders, to ensure shareholders’ equitable treatment by the companies, to enhance the stakeholder value, to promote connuous improvement
of stakeholders engagement, engagement, and to make mely and responsive corporate disclosures balanced with the requirements for condenality in a compeve business environment. environment.
Responsibilies of the Board The Boards of Directors under the Aboiz Group are fully engaged Boards, composed of highly professional members and working under environments of respect and collegiality, where candidness and robust discussions are not only encouraged, but are the norm. The AEV and AboizPower Boards are each composed of three independent directors, and independentminded execuve and non-execuve members who have diverse professional backgrounds, such as economics, corporate nance, engineering, accounng, audit, chief execuve and chief operaons experience, investment banking, private, government sector and mullateral agencies sector, as well as experience in policy-making bodies. These directors lend their in-depth experience and experse to the Board and the Management team in all relevant maers aecng the Aboiz Group. AEV and AboizPower are connually reviewing the roles and responsibilies of their Boards to assess the propriety and value of exisng and proposed Board and Board Commiee protocols, systems and policies. All directors have been carefully selected, nominated, and elected based on their credenals as well as their ability to contribute and share their experse in all relevant maers aecng the business units of AEV and AboizPower. The exisng company policies of AEV and AboizPower such as those found in the By-Laws, the Amended Manual of Corporate Governance, the Code of Ethics and Business Conduct, Board protocols, other Board secretariat guidelines, and the Aboiz Informaon Management System protocols, ensure excellence in the performance of the directors’ roles and responsibilies. The Independent Directors of both AEV and AboizPower worked closely with the internal audit team in the performance of their funcons as members of the Board Audit Commiee.
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Corporate Governance To broaden the directors’ depth of knowledge and industry competence, AEV and AboizPower organize seminars, lectures and orientaons on highly technical topics unique to or relevant to the Aboiz Group’s businesses. These include discussions on changing regulatory oversight of the WESM market and their impact to AboizPower, analysis and review of Aboiz company risks, the ASEAN integraon, the ASEAN Corporate Governance Scorecard, new developments in accounng and nancial reporng standards, the role of directors in the audit process, Philippine economic briengs, and the Aboiz Group’s strategic objecves and idened strategies. AEV and AboizPower each have three Board commiees established to assist their respecve Boards in their oversight responsibility over the Aboiz business units. These commiees are the Board Corporate Governance Commiee (incorporates the former Nominaon and Remuneraon Commiee), the Board Risk and Reputaon Management Commiee, and the Board Audit Commiee. Three independent directors sit on the Board Corporate Governance and Board Audit Commiees, comprising a majority of the membership of these Board Commiees. In the Board Risk and Reputaon Management Commiee, while not constung the majority of the commiee membership, two independent directors sit in the commiee. In 2014, the directors of AEV and AboizPower were very acve and consistent in their aendance at regular and special meengs, and were diligent in the performance of their dues. They had an aendance score of above 86% and the 2013 Board performance appraisal was a 4.6 average on a scale of 1-5.
Rights of Shareholders . c n I , s e r u t n e V y t i u q E z i t i o b A
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The rights of shareholders are unequivocally recognized in the AEV and AboizPower By-laws, Code of Ethics and Business Conduct, and Amended Manual of Corporate Governance. The policy statements found in these documents reect the commitment of AEV and AboizPower to ensure protecon of shareholder interests and concerns, as well as the free exercise of these rights. These include the rights to receive noces and aend shareholders’ meengs, to parcipate and vote in meengs on the basis of the one-share, one-vote rule, to cumulate their votes, to ins pect corporate books
and records, to vote in person, in absena or by proxy, proxy, to receive dividends, to nominate and elect directors to the Board, and to rafy corporate acon, among others.
of shareholders, the raonale of agenda items subject to shareholder approval is included in the noces to shareholders’ meengs.
The Aboiz Group is fully cognizant of the rights of shareholders and believes that its interests are aligned to that of its shareholders, not only in terms of returns on their investments, but also in the sustainability of the businesses. AEV and AboizPower take exceponal eorts in ensuring that shareholders receive mely public informaon aecng the businesses they have invested in, and that they receive their dividends on me.
As long as shareholders provide their contact details, AEV and AboizPower send out noces to all s hareholders of record for all annual shareholders’ meengs, as well as provide them with copies of the Annual Report. The agenda items are listed in the noces and are discussed and voted upon at the annual shareholders’ meengs. At the meengs, the Board of Directors, the chief execuve ocer (CEO), chief nancial ocer, the auditors, the stock transfer agent, and other key ocers of AEV and AboizPower aend and make themselves accessible and available for any quesons that shareholders and investors may have. Quesons from shareholders are encouraged by the CEO.
The commitment of AEV and AboizPower to their shareholders’ rights is shown in their well-dened and published dividend policy, the regular holding of the annual shareholders’ meengs, and the mely and accurate disclosures with the Philippine Stock Exchange, among others. The Board Secretariats of AEV and AboizPower liaise and direct the companies’ stock transfer agent to ensure appropriate responses and the immediate resoluon of shareholders’ queries and requests brought to their aenon.
Equitable Treatment Treatment of Shareholders and Fair Dealings for All Shareholders All shareholders, regardless of the amount of their shareholdings, are given the right to parcipate in company decision-making, pursuant to the one-share one-vote policy of AEV and AboizPower. AboizPower. As a maer of policy and pracce, to ensure that directors, ocers, and even majority shareholders do not take advantage of their posion of knowledge in AEV and AboizPower Group, all shareholders are apprised of all related party transacons, with amounts disclosed, within the Group. All related party transacons in the Group are reported in its consolidated Audited Financial Statements every year. AEV and AboizPower also strictly enforce their respecve Policies on Trading of Company Securies, which regulate insider trading policy, and impose a trading blackout policy to prevent insider opportunism. All shareholders likewise receive noces to all shareholders’ meengs and all agenda items to be discussed and decided upon during the said meengs are set out in the noces and that no new agenda item will be taken up during the meeng. For the guidance
AEV and AboizPower strictly enforce their Codes of Ethics and Business Conduct. The Codes outline the general expectaons of and set standards for directors, and employee behavior and ethical conduct. The Codes encompass prohibited pracces involving conicts of interest, proper dealings with proprietary and condenal informaon, and truthful disclosures of material informaon with transparency in the best interests of the customers, the companies, the shareholders, and the public.
Role of Stakeholders The business model of AEV and AboizPower is one anchored on the sustainable growth of the Group’s businesses with full engagement of its stakeholders. The key stakeholders comprise the team leaders and team members who work toward achieving business strategies; the host communies they work with; the local government units that support and host the Group’s businesses; the customers whom they serve, and the environment that sustains their growth. The Group recognizes that corporate governance principles revolve around relaonships between and among these stakeholders and the Group’s goals. Together, they contribute to the successful pursuit of business goals. AEV and AboizPower corporate governance pracces include policies and procedures that promote awareness and observance of stakeholders’ rights at the company level.
The Aboiz Group is commied to the principles of sustainability to balance the interests of people, pl anet, and prot. By following this rule, the Group has obtained and maintained a good health, safety, and environmental track record, a clear proof that a business can align itself to the principles of sustainability while operang a protable business. The Group launched its Sustainability Policy in 2013, in the belief that all stakeholders must be treated with fairness and that corporate social responsibility is an integral part of doing business. In 2014, AEV and AboizPower connued to implement this policy and as an iniave for the year, year, jointly launched the BeerWorld campaign to encourage all stakeholders to adopt this policy for sustainability. (See Sustainability Report at www.aboizfoundaon.org) As a commitment to its employees, both AEV and AboizPower embarked on a transformaonal leadership program across the organizaon through the creaon of Leadership Circles. As a result of the Leadership Circle iniaves, both organizaons commied to six leadership dimensions that would characterize the way the leaders of AEV and AboizPower would lead. The leadership dimensions are mentoring and development, fostering teamwork, courageous authencity, achieving results, sustaining growth, and integrity. These are intended to transform the Aboiz organizaon from good to great, with the objecve to achieve sustainable breakthrough performance. The Aboiz Group is especially proud of its track record in corporate social responsibility (CSR) commitments. AEV and AboizPower, through through their business units and through the Aboiz Foundaon, Inc., have long standing and deeply rooted pracces, commitments, and partnerships in the eld of CSR. Over the last ve years, the Group has allocated more than P2 bill ion for its various CSR projects that are focused on educaon, enterprise development, and the environment For 2014 alone, the Aboiz Foundaon earmarked around P423 millio n for its CSR projects. These projects were funded by the business units of AEV and AboizPower. (See Aboiz Foundaon Report on its website)
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Corporate Governance To broaden the directors’ depth of knowledge and industry competence, AEV and AboizPower organize seminars, lectures and orientaons on highly technical topics unique to or relevant to the Aboiz Group’s businesses. These include discussions on changing regulatory oversight of the WESM market and their impact to AboizPower, analysis and review of Aboiz company risks, the ASEAN integraon, the ASEAN Corporate Governance Scorecard, new developments in accounng and nancial reporng standards, the role of directors in the audit process, Philippine economic briengs, and the Aboiz Group’s strategic objecves and idened strategies. AEV and AboizPower each have three Board commiees established to assist their respecve Boards in their oversight responsibility over the Aboiz business units. These commiees are the Board Corporate Governance Commiee (incorporates the former Nominaon and Remuneraon Commiee), the Board Risk and Reputaon Management Commiee, and the Board Audit Commiee. Three independent directors sit on the Board Corporate Governance and Board Audit Commiees, comprising a majority of the membership of these Board Commiees. In the Board Risk and Reputaon Management Commiee, while not constung the majority of the commiee membership, two independent directors sit in the commiee. In 2014, the directors of AEV and AboizPower were very acve and consistent in their aendance at regular and special meengs, and were diligent in the performance of their dues. They had an aendance score of above 86% and the 2013 Board performance appraisal was a 4.6 average on a scale of 1-5.
Rights of Shareholders . c n I , s e r u t n e V y t i u q E z i t i o b A
The rights of shareholders are unequivocally recognized in the AEV and AboizPower By-laws, Code of Ethics and Business Conduct, and Amended Manual of Corporate Governance. The policy statements found in these documents reect the commitment of AEV and AboizPower to ensure protecon of shareholder interests and concerns, as well as the free exercise of these rights. These include the rights to receive noces and aend shareholders’ meengs, to parcipate and vote in meengs on the basis of the one-share, one-vote rule, to cumulate their votes, to ins pect corporate books
and records, to vote in person, in absena or by proxy, proxy, to receive dividends, to nominate and elect directors to the Board, and to rafy corporate acon, among others.
of shareholders, the raonale of agenda items subject to shareholder approval is included in the noces to shareholders’ meengs.
The Aboiz Group is fully cognizant of the rights of shareholders and believes that its interests are aligned to that of its shareholders, not only in terms of returns on their investments, but also in the sustainability of the businesses. AEV and AboizPower take exceponal eorts in ensuring that shareholders receive mely public informaon aecng the businesses they have invested in, and that they receive their dividends on me.
As long as shareholders provide their contact details, AEV and AboizPower send out noces to all s hareholders of record for all annual shareholders’ meengs, as well as provide them with copies of the Annual Report. The agenda items are listed in the noces and are discussed and voted upon at the annual shareholders’ meengs. At the meengs, the Board of Directors, the chief execuve ocer (CEO), chief nancial ocer, the auditors, the stock transfer agent, and other key ocers of AEV and AboizPower aend and make themselves accessible and available for any quesons that shareholders and investors may have. Quesons from shareholders are encouraged by the CEO.
The commitment of AEV and AboizPower to their shareholders’ rights is shown in their well-dened and published dividend policy, the regular holding of the annual shareholders’ meengs, and the mely and accurate disclosures with the Philippine Stock Exchange, among others. The Board Secretariats of AEV and AboizPower liaise and direct the companies’ stock transfer agent to ensure appropriate responses and the immediate resoluon of shareholders’ queries and requests brought to their aenon.
Equitable Treatment Treatment of Shareholders and Fair Dealings for All Shareholders All shareholders, regardless of the amount of their shareholdings, are given the right to parcipate in company decision-making, pursuant to the one-share one-vote policy of AEV and AboizPower. AboizPower. As a maer of policy and pracce, to ensure that directors, ocers, and even majority shareholders do not take advantage of their posion of knowledge in AEV and AboizPower Group, all shareholders are apprised of all related party transacons, with amounts disclosed, within the Group. All related party transacons in the Group are reported in its consolidated Audited Financial Statements every year. AEV and AboizPower also strictly enforce their respecve Policies on Trading of Company Securies, which regulate insider trading policy, and impose a trading blackout policy to prevent insider opportunism. All shareholders likewise receive noces to all shareholders’ meengs and all agenda items to be discussed and decided upon during the said meengs are set out in the noces and that no new agenda item will be taken up during the meeng. For the guidance
AEV and AboizPower strictly enforce their Codes of Ethics and Business Conduct. The Codes outline the general expectaons of and set standards for directors, and employee behavior and ethical conduct. The Codes encompass prohibited pracces involving conicts of interest, proper dealings with proprietary and condenal informaon, and truthful disclosures of material informaon with transparency in the best interests of the customers, the companies, the shareholders, and the public.
Role of Stakeholders The business model of AEV and AboizPower is one anchored on the sustainable growth of the Group’s businesses with full engagement of its stakeholders. The key stakeholders comprise the team leaders and team members who work toward achieving business strategies; the host communies they work with; the local government units that support and host the Group’s businesses; the customers whom they serve, and the environment that sustains their growth. The Group recognizes that corporate governance principles revolve around relaonships between and among these stakeholders and the Group’s goals. Together, they contribute to the successful pursuit of business goals. AEV and AboizPower corporate governance pracces include policies and procedures that promote awareness and observance of stakeholders’ rights at the company level.
The Aboiz Group is commied to the principles of sustainability to balance the interests of people, pl anet, and prot. By following this rule, the Group has obtained and maintained a good health, safety, and environmental track record, a clear proof that a business can align itself to the principles of sustainability while operang a protable business. The Group launched its Sustainability Policy in 2013, in the belief that all stakeholders must be treated with fairness and that corporate social responsibility is an integral part of doing business. In 2014, AEV and AboizPower connued to implement this policy and as an iniave for the year, year, jointly launched the BeerWorld campaign to encourage all stakeholders to adopt this policy for sustainability. (See Sustainability Report at www.aboizfoundaon.org) As a commitment to its employees, both AEV and AboizPower embarked on a transformaonal leadership program across the organizaon through the creaon of Leadership Circles. As a result of the Leadership Circle iniaves, both organizaons commied to six leadership dimensions that would characterize the way the leaders of AEV and AboizPower would lead. The leadership dimensions are mentoring and development, fostering teamwork, courageous authencity, achieving results, sustaining growth, and integrity. These are intended to transform the Aboiz organizaon from good to great, with the objecve to achieve sustainable breakthrough performance. The Aboiz Group is especially proud of its track record in corporate social responsibility (CSR) commitments. AEV and AboizPower, through through their business units and through the Aboiz Foundaon, Inc., have long standing and deeply rooted pracces, commitments, and partnerships in the eld of CSR. Over the last ve years, the Group has allocated more than P2 bill ion for its various CSR projects that are focused on educaon, enterprise development, and the environment For 2014 alone, the Aboiz Foundaon earmarked around P423 millio n for its CSR projects. These projects were funded by the business units of AEV and AboizPower. (See Aboiz Foundaon Report on its website)
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Disclosure and Transparency The Boards and Management of AEV and AboizPower believe that good governance, especially in the areas of disclosure and transparency, earns the trust of stakeholders. The Aboiz Group provides a high premium to its collecve reputaon and exerts eorts to maintain the trust gained from its dealings with stakeholders over the years. To this end, AEV and AboizPower strive to consistently maintain their legal compliance and good corporate governance track record. For 2014, there was no deviaon from or violaon of the rules set forth in the Manual of Corporate Governance, other company governance and compliance policies, and protocols. Below is the 2014 PSE Governance Disclosure Report of AEV and AboizPower, in a nutshell. Pursuant to the Group’s commitment to transparency and accountability, AEV and AboizPower have maintained their own dedicated corporate governance web pages on their websites ( www.aboiz.com) and (www.aboizpower.com) . These web pages contain company informaon such as the annual corporate governance reports, the Board Commiees, the Manual of Corporate Governance, Code of Ethics and Business Conduct, minutes of the Annual Shareholders Meengs, investor relaons data, and other relevant informaon to stakeholders. The pages serve as a resource center for stakeholders and the public. As part of the commitment
Talent Talent Management
to sustainability, AEV and AboizPower are maximizing the use of digital technology rather than using scarce paper sources. Visit www.aboiz.com for the full AEV and AboizPower Corporate Governance Report with more details on current corporate governance pracces, corporate achievements, milestones, and iniaves for the year 2014.
2014 AEV and AboizPower Awards AEV and AboizPower have built and consistently maintained their core values and conformed to corporate governance principles in the face of evolving stakeholder concerns and demands in an ever-changing business environment. The Aboiz Group’s dedicated and steadfast adherence to these values and principles is clear proof of the value of the Aboiz business moo: We can do well by doing good. AEV and AboizPower, along with their subsidiaries and aliates, have been consistently recognized in local and internaonal surveys, assessments, and scorecards, as among the Philippines’ best-managed companies. In 2014, they received many awards, especially in the eld of corporate governance and stakeholder engagement. AEV and AboizPower, together with UnionBank, ranked among the top 50 public companies in the ASEAN Corporate Governance Scorecard. These awards and recognion reect the commitment of the Aboiz Group to adopt and implement good corporate governance best pracces. Comply
OUR PSE SCORECARD
Aboiz Equity Ventures, Inc.
Aboiz Power Corporaon
HR MISSION: To Attract, Retain, and Optimize our A-People; constantly adding value to our business
ATTRACT
RETAIN
OPTIMIZE
Strengthen our Ability to Acquire Talent through Innovave Talent Aracon Strategies
Build Organizaonal Capability through Leadership Development and Competency Building
Smulate Talent Engagement through an Inspiring Aboiz Culture
Develop Forward-looking HR Strategies
Building Human Capital – The Aboitiz Way When the Aboiz Group crystallized its business objecves into four strategic pillars – Grow the Business, Stakeholder Engagement, Execuon Excellence, and Build Human Capital – HR’s role in the organizaon could not have been any clearer. The team needed to step up and heed the call to gear up for growth and expansion. As a response, HR quickly came up with their own set of strategic goals for the next three years under the HR pillars of Aract, Retain, and Opmize.
Develops and executes a sound business strategy Establishes a well-structured and funconing board
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Maintains a robust internal audit and control system Recognizes and manages its enterprise risk
Ensures the integrity of nancial reports as well as its external auding funcon Respects and protects the rights of its shareholders, parcularly those that belong to the minority or non-controlling group Adopts and implements and internaonally accepted disclosure and transparency regime Respects and protects the rights and interests of employees, community, community, environment, and other stakeholders Does not engage in abusive related-party transacons transacons insider trading Develops and nurtures a culture of ethics, compliance and enforcement
Strengthening the Ability to Acquire Talen Talentt through Innovave Talent Aracon Strategies The Aboiz employer brand tagline “BeerWays”, launched in 2013, was derived from the Aboiz brand essence of “Passion for Beer Ways”. In 2014, the challenge for the team was clear: Bring the brand message closer to all A-People and make them brand beacons while reaching out to potenal A-People outside the organizaon. Business imperaves set out a tall order for HR to push the boundaries in nding beer ways to market the employer brand using non-tradional media.
Internally, Internally, several campaigns were rolled out and integrated to various exisng team member engagement programs. BeerWays became more than just a tagline; it became every A-Person’s story of why they work in Aboiz. During the BeerWays Day anniversary celebraon, team members across the Group became living examples of BeerWays. The BeerWays BeerWays e-bullen and the visual campaign known as the BeerWays Challenge were launched to keep the brand spirit alive. Tapping non-tradional ways of reaching external talents, Aboiz Careers added a fresh set of innovave talent aracon strategies to its already broad and assorted roster of social media talent sources. The new Aboiz Careers mobile applicaon, one of the rst career mobile apps in the Philippines, is steadily gaining ground. Beerways.ph, a nonbranded “work and lifestyle improvement ps” website, has opened a new pool of talent sources for the Group’s career site, and being a member of LinkedIn Premium has already produced quick wins in its hiring success rate.
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Corporate Governance Disclosure and Transparency The Boards and Management of AEV and AboizPower believe that good governance, especially in the areas of disclosure and transparency, earns the trust of stakeholders. The Aboiz Group provides a high premium to its collecve reputaon and exerts eorts to maintain the trust gained from its dealings with stakeholders over the years. To this end, AEV and AboizPower strive to consistently maintain their legal compliance and good corporate governance track record. For 2014, there was no deviaon from or violaon of the rules set forth in the Manual of Corporate Governance, other company governance and compliance policies, and protocols. Below is the 2014 PSE Governance Disclosure Report of AEV and AboizPower, in a nutshell. Pursuant to the Group’s commitment to transparency and accountability, AEV and AboizPower have maintained their own dedicated corporate governance web pages on their websites ( www.aboiz.com) and (www.aboizpower.com) . These web pages contain company informaon such as the annual corporate governance reports, the Board Commiees, the Manual of Corporate Governance, Code of Ethics and Business Conduct, minutes of the Annual Shareholders Meengs, investor relaons data, and other relevant informaon to stakeholders. The pages serve as a resource center for stakeholders and the public. As part of the commitment
Talent Talent Management
to sustainability, AEV and AboizPower are maximizing the use of digital technology rather than using scarce paper sources.
HR MISSION: To Attract, Retain, and Optimize our A-People; constantly adding value to our business
Visit www.aboiz.com for the full AEV and AboizPower Corporate Governance Report with more details on current corporate governance pracces, corporate achievements, milestones, and iniaves for the year 2014.
2014 AEV and AboizPower Awards AEV and AboizPower have built and consistently maintained their core values and conformed to corporate governance principles in the face of evolving stakeholder concerns and demands in an ever-changing business environment. The Aboiz Group’s dedicated and steadfast adherence to these values and principles is clear proof of the value of the Aboiz business moo: We can do well by doing good. AEV and AboizPower, along with their subsidiaries and aliates, have been consistently recognized in local and internaonal surveys, assessments, and scorecards, as among the Philippines’ best-managed companies. In 2014, they received many awards, especially in the eld of corporate governance and stakeholder engagement. AEV and AboizPower, together with UnionBank, ranked among the top 50 public companies in the ASEAN Corporate Governance Scorecard. These awards and recognion reect the commitment of the Aboiz Group to adopt and implement good corporate governance best pracces. Comply
OUR PSE SCORECARD
Aboiz Equity Ventures, Inc.
Aboiz Power Corporaon
ATTRACT
RETAIN
OPTIMIZE
Strengthen our Ability to Acquire Talent through Innovave Talent Aracon Strategies
Build Organizaonal Capability through Leadership Development and Competency Building
Smulate Talent Engagement through an Inspiring Aboiz Culture
Develop Forward-looking HR Strategies
Building Human Capital – The Aboitiz Way When the Aboiz Group crystallized its business objecves into four strategic pillars – Grow the Business, Stakeholder Engagement, Execuon Excellence, and Build Human Capital – HR’s role in the organizaon could not have been any clearer. The team needed to step up and heed the call to gear up for growth and expansion. As a response, HR quickly came up with their own set of strategic goals for the next three years under the HR pillars of Aract, Retain, and Opmize.
Develops and executes a sound business strategy
Strengthening the Ability to Acquire Talen Talentt through Innovave Talent Aracon Strategies
Establishes a well-structured and funconing board . c n I , s e r u t n e V y t i u q E z i t i o b A
Maintains a robust internal audit and control system Recognizes and manages its enterprise risk
Ensures the integrity of nancial reports as well as its external auding funcon Respects and protects the rights of its shareholders, parcularly those that belong to the minority or non-controlling group Adopts and implements and internaonally accepted disclosure and transparency regime Respects and protects the rights and interests of employees, community, community, environment, and other stakeholders Does not engage in abusive related-party transacons transacons insider trading Develops and nurtures a culture of ethics, compliance and enforcement
The Aboiz employer brand tagline “BeerWays”, launched in 2013, was derived from the Aboiz brand essence of “Passion for Beer Ways”. In 2014, the challenge for the team was clear: Bring the brand message closer to all A-People and make them brand beacons while reaching out to potenal A-People outside the organizaon. Business imperaves set out a tall order for HR to push the boundaries in nding beer ways to market the employer brand using non-tradional media.
Internally, Internally, several campaigns were rolled out and integrated to various exisng team member engagement programs. BeerWays became more than just a tagline; it became every A-Person’s story of why they work in Aboiz. During the BeerWays Day anniversary celebraon, team members across the Group became living examples of BeerWays. The BeerWays BeerWays e-bullen and the visual campaign known as the BeerWays Challenge were launched to keep the brand spirit alive. Tapping non-tradional ways of reaching external talents, Aboiz Careers added a fresh set of innovave talent aracon strategies to its already broad and assorted roster of social media talent sources. The new Aboiz Careers mobile applicaon, one of the rst career mobile apps in the Philippines, is steadily gaining ground. Beerways.ph, a nonbranded “work and lifestyle improvement ps” website, has opened a new pool of talent sources for the Group’s career site, and being a member of LinkedIn Premium has already produced quick wins in its hiring success rate.
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Talent Talent Management
These leadership dimensions were then cascaded to all ocers across the Group. In order to sustain these throughout the organizaon, group iniaves geared towards closing the gap between the current and future state of each dimension among the leaders were idened.
Smulang Talent Engagement through an Inspiring Aboiz Culture The Group’s talent engagement and culture building iniaves are all anchored on the Aboiz core values of integrity, teamwork, innovaon, and responsibility. responsibility. Various programs that highlight these values have been put in place across the Group as business units work towards inslling them in their respecve organizaons. For instance, Pilmico revitalized its Partners in Leadership program, while the AboizPower Generaon Group rolled out the Inyovaon Program, a play on the words “inyo” (your) and “innovaon”, to encourage and reward teams for coming up with connuous improvement and innovave ideas. The Group sustained last year’s values launch through the BeerWays Forum and embedded the values in various acvies conducted throughout the year. year.
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In order to measure knowledge and behavioral indicators, the Reputaon Management Team conducted a brand health check. The results showed a very clear understanding of each of the values and how these are manifested and experienced in the workplace, scoring a consistent 4 out of 5 for both knowledge and behavior. Indeed, the HR Team is moving a step closer everyday in achieving their goal of culvang the Aboiz Way across the Group.
Building Organizaonal Capability through Leadership Development and Competency Building To create a truly high-performing enterprise, it is important to have dened leadership characteriscs.
These dierenate what makes makes up a leader within our culture. From April 2013 to May 2014, a core group of our 22 most senior execuves embarked embarked on a leadership assessment and development journey, journey, seng out to idenfy how to raise the level of leadership competence across the enterprise. This group of leaders worked with a US-based consulng rm, Catalyst Leadership, to help us dene the dimensions that make up an Aboiz Leader:
1 2 3 4 5 6
Mentoring and Developing The leader’s ability to develop others through mentoring and maintain growth-enhancing relaonships. relaonships.
The six dimensions support the Aboiz core values and beliefs that enable everyone to achieve the Group’s mission to create long-term value for all stakeholders. Building Competencies Across the Group Aside from the iniaves for leaders, learning and development is sll a high priority across all levels in the organizaon. The Aboiz Universal Training Training Program (UTP) is sll very much in place and remains instrumental in imparng the essenal competencies for an A-Person to to excel. In 2012, the Group
Creang our Future Organizaon Blueprint In order to beer prepare the workforce to deliver on the Group’s strategic plans, the pracce of future workforce workforce planning has been incorporated into the annual calendars of all units Group-wide. In 2014, HR was able to collate the three-year future workforce outlook for the leadership team, which was presented to the Aboiz Succession Commiee.
Succession remains to be an important challenge for the Group, and HR has responded by connuing the pracce of holding succession reviews twice a year and tracking talent analycs. These leadership developments are paying o nicely, since a large percentage of the Group’s succession strategy connues to come from an internal pool of talents. The current senior execuve team is also largely homegrown.
UTP Participation Rate
Fostering Teamwork Teamwork - The leader’s ability to foster high performance teamwork among team members. Courageous Authencity - The leader’s willingness to take tough stands, bring up the “undiscussable” (risky issues the group avoids discussing), and openly deal with dicult relaonshipproblems.
parcipaon rate to the UTP was at 48%; as of 2014, it reached a record-high 76% and is well on its way to achieving 100% by the end of 2015.
76% Replacement Strategy
48%
51%
25%
30% 70%
75%
Achieving Results - The leader is goal-directed and has a track record of goal achievement and high performance.
Sustainable Growth - The leader’s ability to achieve results that maintains or enhances the organizaon’s long term eecveness. Integrity - How well the leader adheres to the set of core values and beliefs he/she espouses, how well he/she can be trusted to walk the talk.
2012
2013
Source of Key Talent
2014
Internal
Homegrown External
External
t r o p e R l a u n n A
4 1 0 2
81
Talent Talent Management
These leadership dimensions were then cascaded to all ocers across the Group. In order to sustain these throughout the organizaon, group iniaves geared towards closing the gap between the current and future state of each dimension among the leaders were idened.
These dierenate what makes makes up a leader within our culture. From April 2013 to May 2014, a core group of our 22 most senior execuves embarked embarked on a leadership assessment and development journey, journey, seng out to idenfy how to raise the level of leadership competence across the enterprise. This group of leaders worked with a US-based consulng rm, Catalyst Leadership, to help us dene the dimensions that make up an Aboiz Leader:
Smulang Talent Engagement through an Inspiring Aboiz Culture The Group’s talent engagement and culture building iniaves are all anchored on the Aboiz core values of integrity, teamwork, innovaon, and responsibility. responsibility. Various programs that highlight these values have been put in place across the Group as business units work towards inslling them in their respecve organizaons. For instance, Pilmico revitalized its Partners in Leadership program, while the AboizPower Generaon Group rolled out the Inyovaon Program, a play on the words “inyo” (your) and “innovaon”, to encourage and reward teams for coming up with connuous improvement and innovave ideas. The Group sustained last year’s values launch through the BeerWays Forum and embedded the values in various acvies conducted throughout the year. year.
. c n I , s e r u t n e V y t i u q E z i t i o b A
1 2 3
In order to measure knowledge and behavioral indicators, the Reputaon Management Team conducted a brand health check. The results showed a very clear understanding of each of the values and how these are manifested and experienced in the workplace, scoring a consistent 4 out of 5 for both knowledge and behavior. Indeed, the HR Team is moving a step closer everyday in achieving their goal of culvang the Aboiz Way across the Group.
To create a truly high-performing enterprise, it is important to have dened leadership characteriscs.
Building Competencies Across the Group Aside from the iniaves for leaders, learning and development is sll a high priority across all levels in the organizaon. The Aboiz Universal Training Training Program (UTP) is sll very much in place and remains instrumental in imparng the essenal competencies for an A-Person to to excel. In 2012, the Group
Mentoring and Developing The leader’s ability to develop others through mentoring and maintain growth-enhancing relaonships. relaonships.
Creang our Future Organizaon Blueprint In order to beer prepare the workforce to deliver on the Group’s strategic plans, the pracce of future workforce workforce planning has been incorporated into the annual calendars of all units Group-wide. In 2014, HR was able to collate the three-year future workforce outlook for the leadership team, which was presented to the Aboiz Succession Commiee.
Succession remains to be an important challenge for the Group, and HR has responded by connuing the pracce of holding succession reviews twice a year and tracking talent analycs. These leadership developments are paying o nicely, since a large percentage of the Group’s succession strategy connues to come from an internal pool of talents. The current senior execuve team is also largely homegrown.
UTP Participation Rate
Fostering Teamwork Teamwork - The leader’s ability to foster high performance teamwork among team members.
76% Replacement Strategy
Courageous Authencity - The leader’s willingness to take tough stands, bring up the “undiscussable” (risky issues the group avoids discussing), and openly deal with dicult relaonshipproblems.
4 5 6
Building Organizaonal Capability through Leadership Development and Competency Building
The six dimensions support the Aboiz core values and beliefs that enable everyone to achieve the Group’s mission to create long-term value for all stakeholders.
parcipaon rate to the UTP was at 48%; as of 2014, it reached a record-high 76% and is well on its way to achieving 100% by the end of 2015.
48%
51%
25%
30% 70%
75%
Achieving Results - The leader is goal-directed and has a track record of goal achievement and high performance. 2012
Sustainable Growth - The leader’s ability to achieve results that maintains or enhances the organizaon’s long term eecveness.
2013
Source of Key Talent
2014
Homegrown
Internal
External
External
Integrity - How well the leader adheres to the set of core values and beliefs he/she espouses, how well he/she can be trusted to walk the talk.
4 1 0 2
80
81
Talent Talent Management
Risk Management
Developing Forward-looking HR Strategies To protect and ensure the long-term sustainability of all of their iniaves, HR has embarked on measuring and managing human capital risk. Group HR has gone through the rigorous exercise of risk management by idenfying, assessing, and mapping out the human resource risks across the Group and coming up with a treatment for each idened risk. HR is also poised to take a hard and honest look at their operaons, systems, and processes with the goal of becoming best in class. To do this, the team has turned to renowned HR experts and engaged Aon Hewi to conduct a full-blown audit of the Aboiz HR pracces and procedures from both the taccal and the strategic angles. The whole process took place in three months as 14 dierent areas of people pracces were thoroughly examined. examined. Each of these people pracces fall under ve key HR pillars:
Compelling Employer Brand
HighPerformance Culture
Employee Value Proposion
Performance Management
Workforce Planning
Eecve Leadership
High Employee Engagement
Ecient & Eecve HR Organizaon & Delivery
People
Employee Engagement
HR Eecveness
Employee Health & Wellness
HR Development
Manager
Development Rewards & Recognion
High Potenal Development
Learning
Recruitment & On-Boarding
Development Career Management
Leadership Development & Succession Planning
Aboitiz Enterprise Risk Management: Achieving Level 4 in Risk Maturity Now on its third year of assessing the risk maturity of the Aboiz Group, AEV is pleased to announce that the Group’s average rang is at 3.9 on a scale of 1 -5. This puts the Group at the top 15% of all organizaons that parcipate in the global Risk Maturity Index (RMI) assessment conducted by AON annually. annually. The 2014 assessment was parcipated by 110 Aboiz Group team leaders, including board members, C-Suite, key operang team leaders, and risk managers from 16 business units. The RMI is designed to assess, benchmark, and track an organizaon’s risk management process covering 10 characteriscs–board understanding and commitment, risk stewardship, risk communicaon, engagement and accountability, risk idencaon, stakeholder parcipaon, risk informaon & decision making process, integraon and human capital processes, risk analysis and quancaon, and value creaon. Achieving level 4 in risk maturity is about achieving enterpriseresiliency.
The audit arrived at four general conclusions
. c n I , s e r u t n e V y t i u q E z i t i o b A
82
t r o p e R l a u n n A
1
Most Aboiz HR pracces are very mature with several Best Pracces in place, although dierences exist across BUs
3
To prepare for regional growth, Aboiz should consider implemenng common HR IT Systems and enhancing HR Shared Services capabilies
2
Top priories for improvement are Strategic Workforce Planning, Performance Management, Career Management and People Manager Development
4
Strong Leadership buy-in and support will be necessary to connue to succesfully posion Aboiz HR for the future
The results are both inspiring and challenging. The HR team has their work cut out for them in the next few years as they polish and rene processes to ulmately achieve best pracce level. One thing is certain for Aboiz HR: they will be moving with passion toward beer ways as one HR team, aiming only to achieve HR excellence for the organizaon.
Over the last three years, AEV and the Group business units have worked together in developing and execung the key deliverables to achieve l evel 4 anchored on four pillars or focus areas of the Aboiz Group Enterprise Risk Management (ERM) Framework:
1
Governance An established governance structure that supports the risk management process across the Group
2
Process and Integration Having the tools and processes for assessing, migang, monitoring, and reporng risks including the integraon of risk process with Strategy, Human Resources, Informaon Technology, Internal Audit, Legal, Regulatory, Business Development, and other key internal and external processes
3
Risk Finance A risk nance strategy and program to achieve an acceptable balance of retaining and transferring risks
4
Capability Building A connuous educaon and training program that builds organizaon capability, raises awareness, and enhances the Group’s Group’s understanding of managing and measuring risk
These programs, many of them already ongoing, require updang and enhancement year on year to manage internal and external business challenges and opportunies. An integral part of the Aboiz Group’s ERM eorts is to understand and ancipate risks that are crucial to the success of AEV and its businesses. The Group, therefore, therefore, undertakes an annual risk management process to idenfy and report on new and emerging risks, as well as changes to exisng key risks, with special emphasis on treatment mechanisms relang to said risks. A detailed discussion of these risks risks is in the 2014 AEV 20-IS Form submied to the Securies and Exchange Commission.
Aboitiz Groupwide Average RMI Score
3.3
3.9
2.7
TOP
15 % of all global respondents
Dec
Mar
Sept
2011
2013
2014
t r o p e R l a u n n A
4 1 0 2
83
Talent Talent Management
Risk Management
Developing Forward-looking HR Strategies To protect and ensure the long-term sustainability of all of their iniaves, HR has embarked on measuring and managing human capital risk. Group HR has gone through the rigorous exercise of risk management by idenfying, assessing, and mapping out the human resource risks across the Group and coming up with a treatment for each idened risk. HR is also poised to take a hard and honest look at their operaons, systems, and processes with the goal of becoming best in class. To do this, the team has turned to renowned HR experts and engaged Aon Hewi to conduct a full-blown audit of the Aboiz HR pracces and procedures from both the taccal and the strategic angles. The whole process took place in three months as 14 dierent areas of people pracces were thoroughly examined. examined. Each of these people pracces fall under ve key HR pillars:
Compelling Employer Brand
HighPerformance Culture
Employee Value Proposion
Performance Management
Eecve Leadership
High Employee Engagement
Ecient & Eecve HR Organizaon & Delivery
People
Employee Engagement
HR Eecveness
Employee Health & Wellness
HR Development
Manager
Development Rewards & Recognion
Workforce Planning
High Potenal Development
Learning
Recruitment & On-Boarding
Development Career Management
Leadership Development & Succession Planning
Aboitiz Enterprise Risk Management: Achieving Level 4 in Risk Maturity Now on its third year of assessing the risk maturity of the Aboiz Group, AEV is pleased to announce that the Group’s average rang is at 3.9 on a scale of 1 -5. This puts the Group at the top 15% of all organizaons that parcipate in the global Risk Maturity Index (RMI) assessment conducted by AON annually. annually. The 2014 assessment was parcipated by 110 Aboiz Group team leaders, including board members, C-Suite, key operang team leaders, and risk managers from 16 business units.
3
Risk Finance A risk nance strategy and program to achieve an acceptable balance of retaining and transferring risks
4
Capability Building A connuous educaon and training program that builds organizaon capability, raises awareness, and enhances the Group’s Group’s understanding of managing and measuring risk
These programs, many of them already ongoing, require updang and enhancement year on year to manage internal and external business challenges and opportunies.
The RMI is designed to assess, benchmark, and track an organizaon’s risk management process covering 10 characteriscs–board understanding and commitment, risk stewardship, risk communicaon, engagement and accountability, risk idencaon, stakeholder parcipaon, risk informaon & decision making process, integraon and human capital processes, risk analysis and quancaon, and value creaon.
An integral part of the Aboiz Group’s ERM eorts is to understand and ancipate risks that are crucial to the success of AEV and its businesses. The Group, therefore, therefore, undertakes an annual risk management process to idenfy and report on new and emerging risks, as well as changes to exisng key risks, with special emphasis on treatment mechanisms relang to said risks. A detailed discussion of these risks risks is in the 2014 AEV 20-IS Form submied to the Securies and Exchange Commission.
Achieving level 4 in risk maturity is about achieving enterpriseresiliency. The audit arrived at four general conclusions
. c n I , s e r u t n e V y t i u q E z i t i o b A
1
Most Aboiz HR pracces are very mature with several Best Pracces in place, although dierences exist across BUs
3
To prepare for regional growth, Aboiz should consider implemenng common HR IT Systems and enhancing HR Shared Services capabilies
2
Top priories for improvement are Strategic Workforce Planning, Performance Management, Career Management and People Manager Development
4
Strong Leadership buy-in and support will be necessary to connue to succesfully posion Aboiz HR for the future
The results are both inspiring and challenging. The HR team has their work cut out for them in the next few years as they polish and rene processes to ulmately achieve best pracce level. One thing is certain for Aboiz HR: they will be moving with passion toward beer ways as one HR team, aiming only to achieve HR excellence for the organizaon.
Over the last three years, AEV and the Group business units have worked together in developing and execung the key deliverables to achieve l evel 4 anchored on four pillars or focus areas of the Aboiz Group Enterprise Risk Management (ERM) Framework:
1
Governance An established governance structure that supports the risk management process across the Group
2
Process and Integration Having the tools and processes for assessing, migang, monitoring, and reporng risks including the integraon of risk process with Strategy, Human Resources, Informaon Technology, Internal Audit, Legal, Regulatory, Business Development, and other key internal and external processes
Aboitiz Groupwide Average RMI Score
3.9
3.3 2.7
TOP
15 % of all global respondents
Dec
Mar
Sept
2011
2013
2014
t r o p e R l a u n n A
4 1 0 2
82
83
Risk Management
Pi llll ar ars
Corporate Structure
Ke y De lili ve ve ra rabl es es To To Ac Ac hi hi ev eve Le Le ve ve l 4 Board Approved Group RM Policy, Policy, Risk Appete and Tolerance Tolerance Policy
Governance
RM Organizaonal Structures, Roles and Responsibilies Responsibilies Strategic, Operaonal Risk Management Plan, Risk Maps
POW E R
BANKING
F OO D
LAND
ABOITIZPOWER CORPORATION 76.88% (D)
UNIONBANKOFTHEPHILIPPINES 47.43% (D)
PILMICOFOODS CORPORATION 100.00% (D)
ABOITIZLAND,INC. 100.00% (D)
OTH E RS
Project Risk Management Process and Integraon
Business Connuity Plans
FILAGRI HOLDINGS, INC. 100.00% (D)
Risk Quancaon Integraon Risk Management with Key Internal and External Process DISTRIBUTION
GENERATION
PILMICOANIMAL NUTRITION CORPORATION 100.00% (D)
FILAGRI,INC. 100.00%(B)
Group Insurance Programs Risk Finance
Opmize Capves, Self Insurance and Alternave Risk Transfers Risk Maturity Index Assesment Capability Building
DAVAOLIGHT& POWER COMPANY, INC. 99.93% (D)
COTABATOLIGHT&POWER COMPANY 99.94% (D)
RM Metrics at all levels
VISAYANELECTRIC COMPANY, INC. 55.25% (D)
RM Training Programs and Communicaon
SAN FERNANDOELECTRIC LIGHT& POWER CO., NC. N I C. 20.29% (D) 43.78% (B)
Risk Management Informaon System
SUBICENERZONE CORPORATION 650 . 0 % (D ) 999 . 8 % (B )
Compl et eted an and Co Connuous
Ongoing /U /Upcoming 20 2015
MACTANENERZONECORPORATION 100.00% (D)
BALAMBAN ENERZONE CORPORATION 100.00% (D)
2015 Onwards: Onwards: Sustaining Enterprise Resilience
. c n I , s e r u t n e V y t i u q E z i t i o b A
84
AEV’s risk governance and management will connue to evolve as the Group faces an ever-changing business environment in its journey to build organizaon resiliency. The organizaon has to be ready for an unwelcome visit by Murphy, or of a disaster like Typhoon Yolanda that has catastrophic impact. With the Group’s growth and expansion plans, the magnitude of risk exposures and opportunies increases. Sustaining enterprise resiliency can become dicult; it is therefore imperave to raise
awareness and understanding about emerging and new risks. The more aware the Group is of the risks and opportunies in all areas of its businesses, the beer its capability to weather turbulent storms.
LIMA ENERZONECORPORATION 100.00% (D)
THERMA POWER, INC. 100.00% (D)
ACCURIA,INC.& SUBSIDIARIES49.54%(D)
MISAMISORIENTALLAND DEVT.CORP.60.00% (B)
ARCHIPELAGOINSURANCE PTE. LTD. 100.00% (D)
ABOITIZRENEWABLES, INC. 100.00% (D)
THERMA LUZON, INC. 100.00%(B)
HEDCOR,INC. 100.00% (B)
THERMA MARINE, INC. 100.00%(B)
AP RENEWABLES, INC. 100.00% (B)
THERMA MOBILE, INC. 100.00%(B)
LUZON HYDROCORP. 100.00% (B)
THERMA SOUTH, INC. 100.00%(B)
HEDCOR SIBULAN,INC. 100.00% (B)
THERMA POWER VISAYAS, INC. 100.00%(B)
HEDCOR TAMUGAN,INC. 100.00% (B)
THERMA SUBIC, INC. 100.00%(B)
HEDCOR SABANGAN, INC.100.00% (B)
THERMASOUTHERNMINDANAO, INC. 100.00% 0 0%(B)
HEDCOR TUDAYA, INC. 100.00% (B)
THERMA CENTRALVISAYAS, INC. 100.00%(B)
CLEANERGY,INC. 100.00% (B)
THERMA VISAYAS, INC. 80.00%(B)
HEDCOR MT.PROVINCE, INC. 100.00% (B)
ABOVANTHOLDINGS, INC. 60.00%(B)
PAGBILAOENERGY CORPORATION 50.00%(B) REDONDOPENINSULA ENERGY, INC.25.00% (B)
AEV AVIATION,INC. 99.98%(B)
CEBU INDUSTRIALPARK DEVELOPERS, INC.60.00% (B)
LIMA LANDINC. 100.00%(B)
CEBU ENERGYDEVT.CORP. 44.00%(D)
RES/OTHERS
PROPRIEDADDEL NORTE, INC.100.00% (B)
ASEAGASCORPORATION 100.00%(D)
LIMA WATER CORP. 100.00% (D)
CEBU DISTRICTPROPERTY ENTERPRISEINC. 50.00% (B)
CEBU PRAEDIA DEVT.CORP. 100.00%
AEVINTERNATIONALPTE.LTD. 100.00% (D)
PILMICOINTERNATIONAL PTE.LTD. 100.00%(B) 0 0%(B)
PILMICOVHFJOINTSTOCK COMPANY 100.00%(D 0 0%(D)
APOAGUA INFRASTRUCTURA 70.00%(D)
HEDCOR BUKIDNON,INC. 100.00% (B) CORDILLERAHYDROCORP. 100.00% (B) HYDROELECTRIC DEVT.CORP. 100.00% (B) HEDCOR BENGUET, INC. 100.00% (B) HEDCOR ITOGON,INC. 100.00% (B)
Strongly commied to risk management excellence, the Aboiz Group believes that enterprise resiliency is essenal in order to achieve its mission to create longterm value for all its stakeholders.
ABOITIZENERGY SOLUTIONS,INC. 100.00% (D)
ADVENTENERGY,INC. 100.00% (D)
CEBU PRIVATEPOWER CORPORATION 60.00%(D)
TAGOLOANHYDRO CORPORATION 100.00% (B)
EASTASIA UTILITIES CORPORATION 50.00%(D)
MANILA-OSLORENEWABLE ENTERPRISE, INC.83.33% (B)
PRISM ENERGY, INC. 60.00% (D) STEAG STATEPOWER, INC. 34.00%(D) ABOITIZPOWER INTERNATIONALPTE.LTD. 100.00% (D)
SOUTHERN PHILIPPINESPOWER CORPORATION 20.00%(D) WESTERN MINDANAOPOWER CORPORATION 20.00%(D)
SN ABOITIZPOWER – MAGAT, INC.60.00% (D)
t r o p e R l a u n n A
SNABOITIZPOWER Z POWER –RES,INC. 60.00%(D)
SN ABOITIZPOWER – BENGUET, INC.60.00% (D) SN ABOITIZPOWER – GENERATION,INC.60.00% (D)
AS OF MARCH 31, 2015
4 1 0 2
85
Risk Management
Pi llll ar ars
Corporate Structure
Ke y De lili ve ve ra rabl es es To To Ac Ac hi hi ev eve Le Le ve ve l 4 Board Approved Group RM Policy, Policy, Risk Appete and Tolerance Tolerance Policy
Governance
RM Organizaonal Structures, Roles and Responsibilies Responsibilies Strategic, Operaonal Risk Management Plan, Risk Maps
POW E R
BANKING
F OO D
LAND
OTH E RS
ABOITIZPOWER CORPORATION 76.88% (D)
UNIONBANKOFTHEPHILIPPINES 47.43% (D)
PILMICOFOODS CORPORATION 100.00% (D)
ABOITIZLAND,INC. 100.00% (D)
Project Risk Management Process and Integraon
Business Connuity Plans
FILAGRI HOLDINGS, INC. 100.00% (D)
Risk Quancaon Integraon Risk Management with Key Internal and External Process DISTRIBUTION
GENERATION
PILMICOANIMAL NUTRITION CORPORATION 100.00% (D)
PROPRIEDADDEL NORTE, INC.100.00% (B)
FILAGRI,INC. 100.00%(B)
Group Insurance Programs Risk Finance
Opmize Capves, Self Insurance and Alternave Risk Transfers Risk Maturity Index Assesment Capability Building
THERMA POWER, INC. 100.00% (D)
COTABATOLIGHT&POWER COMPANY 99.94% (D)
RM Metrics at all levels
VISAYANELECTRIC COMPANY, INC. 55.25% (D)
RM Training Programs and Communicaon
SAN FERNANDOELECTRIC LIGHT& POWER CO., NC. N I C. 20.29% (D) 43.78% (B)
Risk Management Informaon System
SUBICENERZONE CORPORATION 650 . 0 % (D ) 999 . 8 % (B )
Compl et eted an and Co Connuous
Ongoing /U /Upcoming 20 2015
MACTANENERZONECORPORATION 100.00% (D)
BALAMBAN ENERZONE CORPORATION 100.00% (D)
2015 Onwards: Onwards: Sustaining Enterprise Resilience
. c n I , s e r u t n e V y t i u q E z i t i o b A
AEV’s risk governance and management will connue to evolve as the Group faces an ever-changing business environment in its journey to build organizaon resiliency. The organizaon has to be ready for an unwelcome visit by Murphy, or of a disaster like Typhoon Yolanda that has catastrophic impact. With the Group’s growth and expansion plans, the magnitude of risk exposures and opportunies increases. Sustaining enterprise resiliency can become dicult; it is therefore imperave to raise
awareness and understanding about emerging and new risks. The more aware the Group is of the risks and opportunies in all areas of its businesses, the beer its capability to weather turbulent storms.
ACCURIA,INC.& SUBSIDIARIES49.54%(D)
MISAMISORIENTALLAND DEVT.CORP.60.00% (B)
ARCHIPELAGOINSURANCE PTE. LTD. 100.00% (D)
THERMA LUZON, INC. 100.00%(B)
HEDCOR,INC. 100.00% (B) AP RENEWABLES, INC. 100.00% (B)
THERMA MOBILE, INC. 100.00%(B)
LUZON HYDROCORP. 100.00% (B)
THERMA SOUTH, INC. 100.00%(B)
HEDCOR SIBULAN,INC. 100.00% (B)
THERMA POWER VISAYAS, INC. 100.00%(B)
HEDCOR TAMUGAN,INC. 100.00% (B)
THERMA SUBIC, INC. 100.00%(B)
HEDCOR SABANGAN, INC.100.00% (B)
THERMASOUTHERNMINDANAO, INC. 100.00% 0 0%(B)
HEDCOR TUDAYA, INC. 100.00% (B)
THERMA CENTRALVISAYAS, INC. 100.00%(B)
CLEANERGY,INC. 100.00% (B)
THERMA VISAYAS, INC. 80.00%(B)
HEDCOR MT.PROVINCE, INC. 100.00% (B)
ABOVANTHOLDINGS, INC. 60.00%(B)
LIMA ENERZONECORPORATION 100.00% (D)
CEBU ENERGYDEVT.CORP. 44.00%(D) PAGBILAOENERGY CORPORATION 50.00%(B)
RES/OTHERS
ABOITIZRENEWABLES, INC. 100.00% (D)
THERMA MARINE, INC. 100.00%(B)
REDONDOPENINSULA ENERGY, INC.25.00% (B)
AEV AVIATION,INC. 99.98%(B)
CEBU INDUSTRIALPARK DEVELOPERS, INC.60.00% (B)
LIMA LANDINC. 100.00%(B)
DAVAOLIGHT& POWER COMPANY, INC. 99.93% (D)
ASEAGASCORPORATION 100.00%(D)
LIMA WATER CORP. 100.00% (D)
CEBU DISTRICTPROPERTY ENTERPRISEINC. 50.00% (B)
CEBU PRAEDIA DEVT.CORP. 100.00%
AEVINTERNATIONALPTE.LTD. 100.00% (D)
PILMICOINTERNATIONAL PTE.LTD. 100.00%(B) 0 0%(B)
PILMICOVHFJOINTSTOCK COMPANY 100.00%(D 0 0%(D)
APOAGUA INFRASTRUCTURA 70.00%(D)
HEDCOR BUKIDNON,INC. 100.00% (B) CORDILLERAHYDROCORP. 100.00% (B) HYDROELECTRIC DEVT.CORP. 100.00% (B) HEDCOR BENGUET, INC. 100.00% (B) HEDCOR ITOGON,INC. 100.00% (B)
Strongly commied to risk management excellence, the Aboiz Group believes that enterprise resiliency is essenal in order to achieve its mission to create longterm value for all its stakeholders.
ABOITIZENERGY SOLUTIONS,INC. 100.00% (D)
ADVENTENERGY,INC. 100.00% (D)
CEBU PRIVATEPOWER CORPORATION 60.00%(D)
TAGOLOANHYDRO CORPORATION 100.00% (B)
EASTASIA UTILITIES CORPORATION 50.00%(D)
MANILA-OSLORENEWABLE ENTERPRISE, INC.83.33% (B)
PRISM ENERGY, INC. 60.00% (D) STEAG STATEPOWER, INC. 34.00%(D) ABOITIZPOWER INTERNATIONALPTE.LTD. 100.00% (D)
SOUTHERN PHILIPPINESPOWER CORPORATION 20.00%(D)
SN ABOITIZPOWER – MAGAT, INC.60.00% (D)
t r o p e R l a u n n A
SNABOITIZPOWER Z POWER –RES,INC. 60.00%(D)
SN ABOITIZPOWER – BENGUET, INC.60.00% (D) SN ABOITIZPOWER – GENERATION,INC.60.00% (D)
AS OF MARCH 31, 2015
WESTERN MINDANAOPOWER CORPORATION 20.00%(D)
84
4 1 0 2
85
Aboitiz Equity Ventures, Inc. Board of Directors
. c n I , s e r u t n e V y t i u q E z i t i o b A
86
Jon Ramon Aboitiz
Erramon I. Aboitiz
Justo A. Ortiz
Antonio R. Moraza
Chairman of the Board
Director
Director
Director
t r o p e R l a u n n A
Roberto E. Aboitiz Director
Enrique M. Aboitiz
Jose C. Vitug
Stephen T. CuUnjieng
Raphael Rapha el P. M. Lot illa
Director
Independent Director
Independent Director
Independent Director
4 1 0 2
87
Aboitiz Equity Ventures, Inc. Board of Directors
. c n I , s e r u t n e V y t i u q E z i t i o b A
Jon Ramon Aboitiz
Erramon I. Aboitiz
Justo A. Ortiz
Antonio R. Moraza
Chairman of the Board
Director
Director
Director
t r o p e R l a u n n A
Roberto E. Aboitiz Director
Enrique M. Aboitiz
Jose C. Vitug
Stephen T. CuUnjieng
Raphael Rapha el P. M. Lot illa
Director
Independent Director
Independent Director
Independent Director
86
4 1 0 2
87
Aboitiz Equity Ventures, Inc. Corporate Officers
Stephen G. Paradies
Mikel A. Aboitiz
Senior Vice President Chief Financial Ocer Corporate Informaon Ocer
Xavier Jose M. Aboitiz
Senior Vice President Chief Human Resources Ocer
. c n I , s e r u t n e V y t i u q E z i t i o b A
88
Senior Vice President
Juan Antonio E. Bernad
Luis Miguel O. Aboitiz
Sabin M. Aboitiz
Susan V. Valdez
Román V. Azanza III
Melinda R. Bathan
Senior Vice President
Robert McGregor
Senior Vice President Chief Strategy and Investment Ocer
Senior Vice President Chief Reputaon and Risk Management Ocer
First Vice President
Horacio C. Elicano
First Vice President Chief Technology Ocer
First Vice President
First Vice President Business Development
First Vice President Controller
Narcisa S. Lim
First Vice President Human Resources and Quality
t r o p e R l a u n n A
M. Jasmine S. Oporto Senior Vice President Chief Legal Ocer / Corporate Secretary/ ComplianceOcer
Gabriel T. Mañalac Senior Vice President Group Treasure r
William W. Paradies Vice President Finance
Susan S. Policarpio Vice President Government Relaons
4 1 0 2
89
Aboitiz Equity Ventures, Inc. Corporate Officers
Stephen G. Paradies
Senior Vice President
Xavier Jose M. Aboitiz
Robert McGregor
Senior Vice President Chief Human Resources Ocer
. c n I , s e r u t n e V y t i u q E z i t i o b A
Mikel A. Aboitiz
Senior Vice President Chief Financial Ocer Corporate Informaon Ocer
Juan Antonio E. Bernad
Luis Miguel O. Aboitiz
Sabin M. Aboitiz
Susan V. Valdez
Román V. Azanza III
Melinda R. Bathan
Senior Vice President
Senior Vice President Chief Reputaon and Risk Management Ocer
Senior Vice President Chief Strategy and Investment Ocer
First Vice President
Horacio C. Elicano
First Vice President Chief Technology Ocer
First Vice President
First Vice President Business Development
Narcisa S. Lim
First Vice President Controller
First Vice President Human Resources and Quality
t r o p e R l a u n n A
M. Jasmine S. Oporto Senior Vice President Chief Legal Ocer / Corporate Secretary/ ComplianceOcer
Gabriel T. Mañalac
William W. Paradies
Senior Vice President Group Treasure r
4 1 0 2
Susan S. Policarpio
Vice President Finance
Vice President Government Relaons
88
89
Aboitiz Equity Ventures, Inc. C or po r a te O ffi ce r s
Ricardo F. Lacson, Jr.
Annacel A. Natividad
Julie Ann T. Diongzon
Joseph Y. Tugonon
Jerome J.N. Cachau
Martina Michaela Micha ela Dampf
Vice President Strategy
Vice President Tax Advisory & Compliance
. c n I , s e r u t n e V y t i u q E z i t i o b A
90
B usi ne ss U nit He a d s
Vice President Financial Risk Management
Vice President Business Development
Vice President Treasury Services Group
Vice President Business Development
Antonio R. Moraza
Emmanuel V. Rubio
President Chief Operang Ocer Aboiz Power Corporaon
Execuve Vice P resident Chief Operang Ocer Power Generaon Group
Justo A. Ortiz
Catalino S. Abacan
Chairman Chief Execuve Ocer Union Bank of the Philippines
President Chief Execuve Ocer City Savings Bank
Jaime Jose Y. Aboitiz Execuve Vice President Chief Operang Ocer Power Distribuon Group
Sabin M. Aboitiz
President Chief Execuve Ocer Pilmico Foods Corporaon
t r o p e R l a u n n A
Angelita M. Azuelo
Vice President HR Operaons and Talent Retenon
Andoni F. Aboitiz
President Chief Execuve Ocer Aboiz Land, Inc.
4 1 0 2
91
Aboitiz Equity Ventures, Inc. C or po r a te O ffi ce r s
B usi ne ss U nit He a d s
Ricardo F. Lacson, Jr.
Annacel A. Natividad
Julie Ann T. Diongzon
Joseph Y. Tugonon
Jerome J.N. Cachau
Martina Michaela Micha ela Dampf
Vice President Strategy
Vice President Financial Risk Management
Vice President Tax Advisory & Compliance
. c n I , s e r u t n e V y t i u q E z i t i o b A
Vice President Treasury Services Group
Vice President Business Development
Vice President Business Development
Antonio R. Moraza
Emmanuel V. Rubio
President Chief Operang Ocer Aboiz Power Corporaon
Execuve Vice P resident Chief Operang Ocer Power Generaon Group
Justo A. Ortiz
Catalino S. Abacan
Chairman Chief Execuve Ocer Union Bank of the Philippines
President Chief Execuve Ocer City Savings Bank
Jaime Jose Y. Aboitiz Execuve Vice President Chief Operang Ocer Power Distribuon Group
Sabin M. Aboitiz
President Chief Execuve Ocer Pilmico Foods Corporaon
t r o p e R l a u n n A
Andoni F. Aboitiz
Angelita M. Azuelo
President Chief Execuve Ocer Aboiz Land, Inc.
Vice President HR Operaons and Talent Retenon
90
4 1 0 2
91
Aboitiz Equity Ventures, Inc.
Aboitiz Power Power Corporation
Management Directory 2014-2015 A di ver sifie d po rt foli o wi th a sset s located all over the country
Board of Directors Jon Ramon Aboiz
Roberto E. Aboiz
Justo A. Orz
Jose C. Vitug
Raphael P.M. Lolla
Chairman of the Board
Director
Director
Independent Director
Independent Director
Erramon I. Aboiz
Enrique M. Aboiz
Antonio R. Moraza
Stephen T. CuUnjieng
Director
Director
Director
Independent Director
Jon Ramon Aboiz
Luis Miguel O. Aboiz
Julie Ann T. Diongzon
Marilou P. Plando
Ellen Nikoline B. Felding
Chairman of the Board
First Vice President
Vice President
Assistant Vice President Business Administrator Legal and Corporate Services
Assistant Director Business Development
Corporate Ocers
LiMA EnerZone
Treasury Services Group
Erramon I. Aboiz President & Chief Execuve Ocer
Stephen G. Paradies Senior Vice President Chief Financial Ocer Corporate Informaon Ocer
Mikel A. Aboiz Senior Vice President
Juan Antonio E. Bernad Senior Vice President
Xavier Jose M. Aboiz Senior Vice President
Chief Human Resources Ocer
Robert McGregor Senior Vice President
Chief Strategy and Investment Ocer
Susan V. Valdez Senior Vice President
Chief Reputaon and Risk ManagementOcer
M. Jasmine S. Oporto Senior Vice President Chief Legal Ocer CorporateSecretary Compliance Ocer
Gabriel T. Mañalac
Sabin M. Aboiz First Vice President
Joseph Y. Tugonon Vice President
Horacio C. Elicano First Vice President
Chief Technology Ocer
Román V. Azanza III
Melinda R. Bathan First Vice President Controller
Narcisa S. Lim First Vice President
Human Resources and Quality
Assistant Vice President Corporate Secretarial and
Labor and Ligaon Legal and Corporate Services
Angelita M. Azuelo
Compliance Services for Legal and Corporate Services Assistant Corporate Secretary
Erwin I. Jallorina
HR Operaons and Talent Retenon
Jerome J.N. Cachau Vice President Business Development
Marna Michaela Dampf Vice President Business Development
Robin Patrick R. Sarmiento
Vice President Finance
Susan S. Policarpio Vice President
GovernmentRelaons
Ricardo F. Lacson, Jr. Vice President
Strategy
Annacel A. Navidad Vice President Financial Risk Management
Senior Vice President Group Treasurer
Assistant Vice President Business Development
Maria Lourdes Y. Tanate Ma. Clarice U. Marucut
Assistant Vice President Group Internal Audit
Assistant Vice President Project Finance
Andy G. Torrato
Ma. Theresa L. Gaddi
Assistant Vice President
Physical Assets Security
Assistant Vice President
Francisco Victor G. Salas
HumanResources
Christopher M. Camba
Strategy and Corporate Finance
Communicaon
GovernmentRelaons
Ronaldo S. Ramos
Maria Luisa L. Marasigan
Assistant Vice President Business Risk Management
Jose Angelo T. Fernandez Assistant Vice President Business Development
Dave Michael V. Valeriano
Sustainability, Corporate Branding & Communicaon
Aylmerita C. Peñaloza
IT Operaons and Informaon Security
Assistant Vice President
Accounng
Assistant Vice President Business Development
Assistant Vice President IT Architect
Jose Grego U. Sitoy
Olyzza M. Oyangoren
Juan Manuel M. Gatmaitan
Francis S. Cabanban
Assistant Vice President InvestorRelaons
Assistant Vice President Treasury
Assistant Vice President
Assistant Vice President
Marn John S. Yasay Assistant Vice President
Assistant Vice President
Binga Hydro Benguet Hydro 1-11 Magat Hydro SubicEnerZone
Assistant Vice President Corporate Branding and
Assistant Vice President
William W. Paradies
Assistant Vice President
Tax Advisory & Compliance
Vice President First Vice President Business Development
Leah I. Geraldez
Catherine R. Atay
Bakun Hydro Ambuklao Hydro
GovernmentRelaons
Tiwi Geothermal MakBan Geothermal SFELAPCO Pagbilao Mobile 3-6 VECO AESI Cebu Mactan Mactan EnerZone Balamban EnerZone Toledo Mobile 2
Mindanao Zamboanga Mobile 1
Davao Light
Mercedes Maria B. Zamora
Davao Hydro 1-5
Assistant Vice President TalentOpmizaon
Sibulan Hydro Davao
Board Commiees 2014-2015
Cotabato Light
Board Corporate Governance Commiee
Cotabato
Jon Ramon Aboiz
Jose C. Vitug
Stephen T. CuUnjieng
M. Jasmine S. Oporto
Chairman of the Commiee Chairman of the Board
Member of the Commiee Independent Director
Member of the Commiee Independent Director
Ex-Ocio Member of the Commiee Compliance Ocer
Roberto E. Aboiz
Raphael P.M. Lolla
Xavier Jose M. Aboiz
Member of the Commiee
Member of the Commiee Independent Director
Ex-Ocio Member of the Commiee Chief Human Resources Ocer
GeneralSantos AdventEnergy ULGPP
. c n I , s e r u t n e V y t i u q E z i t i o b A
Director
Board Audit Commiee Jose C. Vitug
Raphael P.M. Lolla
Stephen T. CuUnjieng
Roberto E. Aboiz
Justo A. Orz
Chairman of the Commiee Independent Director
Member of the Commiee Independent Director
Member of the Commiee Independent Director
Member of the Commiee Director
Member of the Commiee Director
Board Risk and Reputaon Management Commiee Commiee Enrique M. Aboiz
Jon Ramon Aboiz
Erramon I. Aboiz
Susan V. Valdez
Chairman of the Commiee Director
Member of the Commiee Chairman of the Board
Member of the Commiee President and Chief Execuve Ocer
Justo A. Orz
Stephen T. CuUnjieng
Stephen G. Paradies
Ex-OcioMember Chief Reputaon Ocer and Risk Management Ocer
Member of the Commiee
Member of the C ommiee Independent Director
Ex-OcioMember Chief Financial Ocer
Director
92
Renewable Non-Renewable Sales and Retail Distribuon
t r o p e R l a u n n A
4 1 0 2
93
Aboitiz Equity Ventures, Inc.
Aboitiz Power Power Corporation
Management Directory 2014-2015 A di ver sifie d po rt foli o wi th a sset s located all over the country
Board of Directors Jon Ramon Aboiz
Roberto E. Aboiz
Justo A. Orz
Jose C. Vitug
Raphael P.M. Lolla
Chairman of the Board
Director
Director
Independent Director
Independent Director
Erramon I. Aboiz
Enrique M. Aboiz
Antonio R. Moraza
Stephen T. CuUnjieng
Director
Director
Director
Independent Director
Jon Ramon Aboiz
Luis Miguel O. Aboiz
Julie Ann T. Diongzon
Marilou P. Plando
Ellen Nikoline B. Felding
Chairman of the Board
First Vice President
Vice President
Assistant Vice President Business Administrator Legal and Corporate Services
Assistant Director Business Development
Corporate Ocers
LiMA EnerZone
Treasury Services Group
Erramon I. Aboiz President & Chief Execuve Ocer
Stephen G. Paradies Senior Vice President Chief Financial Ocer Corporate Informaon Ocer
Mikel A. Aboiz Senior Vice President
Juan Antonio E. Bernad Senior Vice President
Xavier Jose M. Aboiz Senior Vice President
Chief Human Resources Ocer
Robert McGregor Senior Vice President
Chief Strategy and Investment Ocer
Susan V. Valdez Senior Vice President
Chief Reputaon and Risk ManagementOcer
M. Jasmine S. Oporto Senior Vice President Chief Legal Ocer CorporateSecretary Compliance Ocer
Gabriel T. Mañalac
Sabin M. Aboiz First Vice President
Joseph Y. Tugonon Vice President
Horacio C. Elicano First Vice President
Chief Technology Ocer
Tax Advisory & Compliance
Angelita M. Azuelo Vice President
Román V. Azanza III First Vice President Business Development
Melinda R. Bathan First Vice President Controller
Narcisa S. Lim First Vice President
Human Resources and Quality
HR Operaons and Talent Retenon
Jerome J.N. Cachau Vice President Business Development
Marna Michaela Dampf Vice President Business Development
Robin Patrick R. Sarmiento
Vice President Finance
Susan S. Policarpio Vice President
GovernmentRelaons
Ricardo F. Lacson, Jr. Vice President
Annacel A. Navidad Vice President Financial Risk Management
Senior Vice President Group Treasurer
Assistant Vice President Corporate Secretarial and
Labor and Ligaon Legal and Corporate Services
Erwin I. Jallorina
Assistant Corporate Secretary
Assistant Vice President Business Development
Maria Lourdes Y. Tanate Ma. Clarice U. Marucut
Assistant Vice President Group Internal Audit
Assistant Vice President Project Finance
Andy G. Torrato
Ma. Theresa L. Gaddi
Assistant Vice President
Physical Assets Security
Assistant Vice President
Francisco Victor G. Salas
HumanResources
Strategy and Corporate Finance
Communicaon
GovernmentRelaons
Ronaldo S. Ramos
Maria Luisa L. Marasigan
Assistant Vice President Business Risk Management
Jose Angelo T. Fernandez Assistant Vice President Business Development
Sustainability, Corporate Branding & Communicaon
Aylmerita C. Peñaloza
IT Operaons and Informaon Security
Assistant Vice President
Accounng
Assistant Vice President Business Development
Assistant Vice President IT Architect
Jose Grego U. Sitoy
Olyzza M. Oyangoren
Juan Manuel M. Gatmaitan
Francis S. Cabanban
Assistant Vice President InvestorRelaons
Assistant Vice President Treasury
Assistant Vice President
Assistant Vice President
Marn John S. Yasay Assistant Vice President
Assistant Vice President
Binga Hydro Benguet Hydro 1-11 Magat Hydro SubicEnerZone
Compliance Services for Legal and Corporate Services
Christopher M. Camba
Dave Michael V. Valeriano
Strategy
Assistant Vice President
Assistant Vice President Corporate Branding and
Assistant Vice President
William W. Paradies
Leah I. Geraldez
Catherine R. Atay
Bakun Hydro Ambuklao Hydro
GovernmentRelaons
Tiwi Geothermal MakBan Geothermal SFELAPCO Pagbilao Mobile 3-6 VECO AESI Cebu Mactan Mactan EnerZone Balamban EnerZone Toledo Mobile 2
Mindanao Zamboanga Mobile 1
Davao Light
Mercedes Maria B. Zamora
Davao Hydro 1-5
Assistant Vice President TalentOpmizaon
Sibulan Hydro Davao
Board Commiees 2014-2015
Cotabato Light
Board Corporate Governance Commiee
Cotabato
Jon Ramon Aboiz
Jose C. Vitug
Stephen T. CuUnjieng
M. Jasmine S. Oporto
Chairman of the Commiee Chairman of the Board
Member of the Commiee Independent Director
Member of the Commiee Independent Director
Ex-Ocio Member of the Commiee Compliance Ocer
Roberto E. Aboiz
Raphael P.M. Lolla
Xavier Jose M. Aboiz
Member of the Commiee
Member of the Commiee Independent Director
Ex-Ocio Member of the Commiee Chief Human Resources Ocer
GeneralSantos AdventEnergy ULGPP
. c n I , s e r u t n e V y t i u q E z i t i o b A
Director
Board Audit Commiee Jose C. Vitug
Raphael P.M. Lolla
Stephen T. CuUnjieng
Roberto E. Aboiz
Justo A. Orz
Chairman of the Commiee Independent Director
Member of the Commiee Independent Director
Member of the Commiee Independent Director
Member of the Commiee
Member of the Commiee
Director
Director
Board Risk and Reputaon Management Commiee Commiee Enrique M. Aboiz
Jon Ramon Aboiz
Erramon I. Aboiz
Susan V. Valdez
Chairman of the Commiee Director
Member of the Commiee Chairman of the Board
Member of the Commiee President and Chief Execuve Ocer
Justo A. Orz
Stephen T. CuUnjieng
Stephen G. Paradies
Ex-OcioMember Chief Reputaon Ocer and Risk Management Ocer
Member of the Commiee
Member of the C ommiee Independent Director
Ex-OcioMember Chief Financial Ocer
Director
t r o p e R l a u n n A
Renewable Non-Renewable Sales and Retail
4 1 0 2
Distribuon
92
93
Aboitiz Power Power Corporation Board of Directors
n o i t a r o p r o C r e w o P z i t i o b A
94
Enrique M. Aboitiz
Jon Ramon Aboitiz
Mikel A. Aboitiz
Jaime Jose Y. Aboitiz
Chairman of the Board
Vice Chairman
Director
Director
t r o p e R l a u n n A
Erramon I. Aboitiz
Antonio R. Moraza
Carlos C. Ejercito
Romeo L. Bernardo
Alfonso A. Uy
Director
Director
Independent Director
Independent Director
Independent Director
4 1 0 2
95
Aboitiz Power Power Corporation Board of Directors
n o i t a r o p r o C r e w o P z i t i o b A
Enrique M. Aboitiz
Jon Ramon Aboitiz
Mikel A. Aboitiz
Jaime Jose Y. Aboitiz
Chairman of the Board
Vice Chairman
Director
Director
t r o p e R l a u n n A
Erramon I. Aboitiz
Antonio R. Moraza
Carlos C. Ejercito
Romeo L. Bernardo
Alfonso A. Uy
Director
Director
Independent Director
Independent Director
Independent Director
94
4 1 0 2
95
Aboitiz Power Power Corporation Corporate Officers
Erramon I. Aboitiz Chief Execuve Ocer
Jaime Jose Y. Aboitiz Execuve Vice President Chief Operang Ocer Power Distribuon Group
n o i t a r o p r o C r e w o P z i t i o b A
96
Antonio R. Moraza
President & Chief Operang Ocer
Juan Antonio E. Bernad Execuve Vice President Strategy and Regulaon
Emmanuel V. Rubio
Execuve Vice President Chief Operang Ocer Power Generaon Group
Luis Miguel O. Aboitiz
Senior Vice President Power Markeng and Trading
Gabriel T. Mañalac Senior Vice President Group Treasurer
Manuel M. Orig First Vice President Mindanao Aairs
Manuel R. Lozano
First Vice President Chief Financial Ocer Corporate Informaon Ocer
Joseph Trillana T. Gonzales First Vice President GeneralCounsel AssistantCorporateSecretary
Ma. Chona Y. Tiu
First Vice President Chief Financial Ocer Power Distribuon Group
Alvin S. Arco
First Vice President Regulatory Aairs
t r o p e R l a u n n A
Donald L. Lane Execuve Director Business Development
M. Jasmine S. Oporto Corporate Secretary ComplianceOcer
Susan V. Valdez
Chief Reputaon and Risk Management Ocer
Thomas J. Sliman, Jr. Execuve Director Projects
John Anthony Crane SeniorDirector Business Development
James J. Timko II
Senior Director Business Development
4 1 0 2
97
Aboitiz Power Power Corporation Corporate Officers
Erramon I. Aboitiz Chief Execuve Ocer
Jaime Jose Y. Aboitiz Execuve Vice President Chief Operang Ocer Power Distribuon Group
n o i t a r o p r o C r e w o P z i t i o b A
Antonio R. Moraza
President & Chief Operang Ocer
Juan Antonio E. Bernad Execuve Vice President Strategy and Regulaon
Emmanuel V. Rubio
Execuve Vice President Chief Operang Ocer Power Generaon Group
Luis Miguel O. Aboitiz
Senior Vice President Power Markeng and Trading
Manuel R. Lozano
Gabriel T. Mañalac
Ma. Chona Y. Tiu
First Vice President Chief Financial Ocer Corporate Informaon Ocer
Senior Vice President Group Treasurer
First Vice President Chief Financial Ocer Power Distribuon Group
Joseph Trillana T. Gonzales
Manuel M. Orig
Alvin S. Arco
First Vice President GeneralCounsel AssistantCorporateSecretary
First Vice President Mindanao Aairs
First Vice President Regulatory Aairs
t r o p e R l a u n n A
Donald L. Lane Execuve Director Business Development
M. Jasmine S. Oporto Corporate Secretary ComplianceOcer
Susan V. Valdez
Chief Reputaon and Risk Management Ocer
Thomas J. Sliman, Jr.
John Anthony Crane
Execuve Director Projects
James J. Timko II
SeniorDirector Business Development
Senior Director Business Development
96
4 1 0 2
97
Aboitiz Power Power Corporation Corporate Officers
Liza Luv L. Tajanlangit-Montelibano Vice President Chief Financial Ocer Power Generaon Group
Susan S. Policarpio Vice President Government Relaons
n o i t a r o p r o C r e w o P z i t i o b A
98
Kenton E. Heuertz Director AssetManagement
Wilfredo R. Bacareza, Jr. Vice President Business Development
Bienamer D. Garcia
Vice President CustomerServices Power Distribuon Group
Yari A. Miralao
Vice President Business Development
Roland U. Gaerlan Gaerlan
Crisanto R. Laset, Jr.
Vice President Sales and Markeng
Vice President Trading
Artemio D. Magnayon
Rodrigo M. San Pedro, Jr.
Marco R. Carlos Vice President Safety, Health, Environment and Quality
Ma. Kristina C.V. Rivera
Vice President Human Resources and Quality
Vice President Business Development
Vice President Business Development Commercial
t r o p e R l a u n n A
Cristina B. Beloria Vice President Controller
Ana Liza M. Aleta
Vice President Strategy, Systems and Performance
Dennis A. de la Serna Vice President Regulatory Aairs
Raul C. Lucero
Vice President Engineering Power Distribuon Group
Ronald Enrico V. Abad Vice President Project Development
4 1 0 2
99
Aboitiz Power Power Corporation Corporate Officers
Liza Luv L. Tajanlangit-Montelibano Vice President Chief Financial Ocer Power Generaon Group
Susan S. Policarpio Vice President Government Relaons
n o i t a r o p r o C r e w o P z i t i o b A
Kenton E. Heuertz Director AssetManagement
Wilfredo R. Bacareza, Jr. Vice President Business Development
Bienamer D. Garcia
Vice President CustomerServices Power Distribuon Group
Roland U. Gaerlan Gaerlan
Crisanto R. Laset, Jr.
Vice President Sales and Markeng
Vice President Trading
Artemio D. Magnayon
Rodrigo M. San Pedro, Jr.
Marco R. Carlos Vice President Safety, Health, Environment and Quality
Yari A. Miralao
Ma. Kristina C.V. Rivera
Vice President Business Development
Vice President Human Resources and Quality
Vice President Business Development Commercial
Vice President Business Development
t r o p e R l a u n n A
Cristina B. Beloria Vice President Controller
Ana Liza M. Aleta
Vice President Strategy, Systems and Performance
Raul C. Lucero
Dennis A. de la Serna
4 1 0 2
Ronald Enrico V. Abad
Vice President Engineering Power Distribuon Group
Vice President Regulatory Aairs
Vice President Project Development
98
99
Aboitiz Power Power Corporation
Aboitiz Power Power Corporation
Business Unit Heads
Management Directory 2014-2015 Board of Directors Enrique M. Aboiz
Erramon I. Aboiz
Mikel A. Aboiz
Carlos C. Ejercito
Alfonso A. Uy
Chairman of the Board
Director
Director
Independent Director
Independent Director
Jon Ramon Aboiz
Antonio R. Moraza
Jaime Jose Y. Aboiz
Romeo L. Bernardo
Vice Chairman
Director
Director
Independent Director
Power Distribuon Group
Crisna B. Beloria
Clovis B. Racho
Irwin C. Pagdalian
Manuel M. Orig
Vice President Controller
Assistant Vice President
Assistant Vice President Special Projects Power Distribuon Group
Corporate Ocers Enrique M. Aboiz Chairman of the Board
Jon Ramon Aboiz Vice Chairman of the Board
Erramon I. Aboiz Chief Execuve Ocer
Antonio R. Moraza President & Chief Operang Ocer
Emmanuel V. Rubio
Emmanuel V. Rubio
President Chief Execuve Ocer SNAP-Magat/SNAP-Benguet
Benjamin A. Cariaso, Jr.
President Chief Operang Ocer Therma Luzon, Inc. / Therma South, Inc.
Rene B. Ronquillo
President Chief Operang Ocer Hedcor Group
Execuve Vice President Chief Operang Ocer Power Generaon Group
Liza Luv L. TajanlangitMontelibano
Vice President RegulatoryAairs
Roberto V. Orozco
Assistant Vice President Energy Sales (Luzon)
Anne S. Jimenez
Assistant Vice President
Marco R. Carlos
Civil Site Construcon
Vice President
Safety,Health,Envir y,Health,Environmentand Quality
Roland U. Gaerlan
Rowena V. Romero
Katrina M. Platon
Assistant Vice President
Assistant Vice President
Energy Accounts and Support
Legal and Regulatory Aairs
Services
Sales and Markeng
Arazeli L. Malapad
Consuelo D. Labao
Assistant Vice President Accounng Power Generaon Group (Luzon)
Assistant Vice President
Crisanto R. Laset, Jr.
Paquita S. Tigue-Rafols
Head Business Soluons Group
Donald L. Lane ExecuveDirector Business Development
M. Jasmine S. Oporto CorporateSecretary Compliance Ocer
Gabriel T. Mañalac Senior Vice President Group Treasurer
Senior Vice President Chief Operang Ocer Visayan Electric Company, Inc.
RegulatoryAairs
CherryAquino-Javier
Assistant Vice President InformaonServices Power Distribuon Group
Assistant Vice President Industry Aairs
Dennis A. de la Serna
Chief Financial Ocer Power GeneraonGroup
Power Markeng and Trading
President Chief Operang Ocer Therma Marine, Inc. / Therma Mobile, Inc.
Alvin S. Arco
Aladino B. Borja, Jr.
Strategy,SystemsandPerformance
Execuve Vice President Chief Operang Ocer Power Distribuon Group
Luis Miguel O. Aboiz
President Chief Operang Ocer AP Renewables, Inc.
Assistant Corporate Secretary
First Vice President
Ana Liza M. Aleta Vice President
Vice President
Senior Vice President
Jose Venancio P. Batiquin
Joseph Trillana T. Gonzales
Vice President
Execuve Vice President Strategy and Regulaon
Felino M. Bernardo
Mindanao Aairs
First Vice President General Counsel
Jaime Jose Y. Aboiz
Juan Antonio E. Bernad
Sebastian R. Lacson
First Vice President
Procurement and Logiscs Power Distribuon Group
Thomas J. Sliman, Jr. ExecuveDirector Projects
Senior Director Business Development
Human Resources and Quality
Power Generaon (Oil Group)
Pascualito Timothy D. Masion
James J. Timko II
Artemio D. Magnayon
Ma. Cielita C. Añiga
Head IT Facilies Group
Vice President Business Development
Assistant Vice President
Senior Director Business Development
Kenton E. Heuertz
Rodrigo M. San Pedro, Jr.
Gil G. Cardiel
Human Resources and Quality Power Distribuon Group
Assistant Vice President Geosciences
Raymond Carl R. Roseus
Director Asset Management
Vice President Business Development Commercial
Assistant Vice President KeyAccounts
Bienamer D. Garcia
Ronald Enrico V. Abad
Carlo P. Cruz
Vice President Customer Services
Vice President ProjectDevelopment
Assistant Vice President MarkengServices
Timothy Joseph P. Abay Assistant Vice President Controller
Nina Ylagan-Pedro
Raul C. Lucero
Katrina Michaela D. Calleja
Assistant Vice President HR Operaons, Aracon & Opmizaon
Vice President
Vice President Engineering
Assistant Vice President Corporate Branding and
Raizza L. Manuel
GovernmentRelaons
Power Distribuon Group
Communicaon
Assistant Vice President
Wilfredo R. Bacareza, Jr.
Mark Albert B. Canlas
Dave Michael V. Valeriano
Vice President Business Development
Assistant Vice President Business Development
Assistant Vice President
Benedick M. Salvador
InvestorRelaons
Assistant Vice President
Yari A. Miralao
Carlos Copernicus S. Payot
Socorro L. Pandol
Vice President Business Development
Assistant Vice President Controller
Assistant Vice President Environmental Management
Power Distribuon Group
Power Generaon Group
Power Distribuon Group
Chief Reputaon and Risk ManagementOcer
Manuel R. Lozano First Vice President
Ma. Chona Y. Tiu
Lemuel P. Quilos
Assistant Vice President Corporate Services
Susan S. Policarpio
First Vice President
Ma. Krisna C.V. Rivera
Finance-SpecialProjects
Vice President
John Anthony Crane
Susan V. Valdez
Chief Financial Ocer Corporate Informaon Ocer
Vice President Trading
Chief Financial Ocer
HR Retenon & Systems
Energy Sales (Visayas and Mindanao)
Board Commiees 2014-2015 Board Corporate Governance Commiee
n o i t a r o p r o C r e w o P z i t i o b A
Jon Ramon Aboiz
Carlos C. Ejercito
Xavier J. Aboiz
M. Jasmine S. Oporto
Chairman of the Commiee Vice Chairman
Member of the Commiee Independent Director
Ex-OcioMember SVP - Chief Human Resources Ocer – AEV
Ex-OcioMember Compliance Ocer
Erramon I. Aboiz
Romeo L. Bernardo
Alfonso A. Uy
Member of the Commiee
Member of the Commiee Independent Director
Member of the Commiee Independent Director
Director
Board Audit Commiee Carlos C. Ejercito
Romeo L. Bernardo
Alfonso A. Uy
Antonio R. Moraza
Mikel A. Aboiz
Chairman of the Commiee Independent Director
Member of the Commiee Independent Director
Member of the Commiee Independent Director
Member of the Commiee Director
Member of the Commiee Director
Board Risk and Reputaon Management Commiee
Arturo M. Milan Execuve Vice President Chief Operang Ocer Davao Light and Power Company, Inc.
Rodger S. Velasco
Senior Vice President Chief Operang Ocer Cotabato Light and Power Company
Dante T. Pollescas
Senior Vice President Chief Operang Ocer Subic, Balamban, Mactan, and LiMA EnerZones
Enrique M. Aboiz
Mikel A. Aboiz
Alfonso A. Uy
Susan V. Valdez
Chairman of the Commiee Chairman of the Board
Member of the Commiee Director
Member of the Commiee Independent Director
Ex-OcioMember Chief Reputaon and Risk Management Ocer
Antonio R. Moraza
Carlos C. Ejercito
Manuel R. Lozano
Member of the Commiee
Member of the Commiee Independent Director
Ex-OcioMember Chief Financial Ocer
Director
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Aboitiz Power Power Corporation
Aboitiz Power Power Corporation
Business Unit Heads
Management Directory 2014-2015 Board of Directors Enrique M. Aboiz
Erramon I. Aboiz
Mikel A. Aboiz
Carlos C. Ejercito
Alfonso A. Uy
Chairman of the Board
Director
Director
Independent Director
Independent Director
Jon Ramon Aboiz
Antonio R. Moraza
Jaime Jose Y. Aboiz
Romeo L. Bernardo
Vice Chairman
Director
Director
Independent Director
Power Distribuon Group
Crisna B. Beloria
Clovis B. Racho
Irwin C. Pagdalian
Manuel M. Orig
Vice President Controller
Assistant Vice President
Assistant Vice President Special Projects Power Distribuon Group
Corporate Ocers Enrique M. Aboiz Chairman of the Board
Jon Ramon Aboiz
First Vice President
Vice Chairman of the Board
Chief Execuve Ocer
First Vice President General Counsel
Antonio R. Moraza
Assistant Corporate Secretary
President & Chief Operang Ocer
Emmanuel V. Rubio
Benjamin A. Cariaso, Jr.
Emmanuel V. Rubio
Rene B. Ronquillo
President Chief Operang Ocer Therma Luzon, Inc. / Therma South, Inc.
President Chief Execuve Ocer SNAP-Magat/SNAP-Benguet
President Chief Operang Ocer Hedcor Group
RegulatoryAairs
Execuve Vice President Chief Operang Ocer Power Generaon Group
Liza Luv L. TajanlangitMontelibano
Vice President RegulatoryAairs
Roberto V. Orozco
Marco R. Carlos
Assistant Vice President Civil Site Construcon
Assistant Vice President Energy Sales (Luzon)
Dennis A. de la Serna
Vice President
Safety,Health,Envir y,Health,Environmentand Quality
Roland U. Gaerlan
Anne S. Jimenez
Rowena V. Romero
Katrina M. Platon
Assistant Vice President
Assistant Vice President
Energy Accounts and Support
Legal and Regulatory Aairs
Services
Chief Financial Ocer Power GeneraonGroup
Sales and Markeng
Arazeli L. Malapad
Consuelo D. Labao
Crisanto R. Laset, Jr. Vice President Trading
Assistant Vice President Accounng Power Generaon Group (Luzon)
Assistant Vice President
Thomas J. Sliman, Jr.
Paquita S. Tigue-Rafols
Head Business Soluons Group
Donald L. Lane
ExecuveDirector Projects
M. Jasmine S. Oporto
Gabriel T. Mañalac Senior Vice President Group Treasurer
Lemuel P. Quilos
Vice President
Assistant Vice President Corporate Services
Senior Director Business Development
Human Resources and Quality
Power Generaon (Oil Group)
Pascualito Timothy D. Masion
Artemio D. Magnayon
Ma. Cielita C. Añiga
Head IT Facilies Group
Vice President Business Development
Assistant Vice President
James J. Timko II
Kenton E. Heuertz
CorporateSecretary Compliance Ocer
Ma. Krisna C.V. Rivera
Finance-SpecialProjects
John Anthony Crane
Senior Director Business Development
ExecuveDirector Business Development
Senior Vice President Chief Operang Ocer Visayan Electric Company, Inc.
Assistant Vice President Industry Aairs
Execuve Vice President Chief Operang Ocer Power Distribuon Group
Power Markeng and Trading
President Chief Operang Ocer Therma Marine, Inc. / Therma Mobile, Inc.
CherryAquino-Javier
Assistant Vice President InformaonServices Power Distribuon Group
Jaime Jose Y. Aboiz
Luis Miguel O. Aboiz
President Chief Operang Ocer AP Renewables, Inc.
Aladino B. Borja, Jr.
Strategy,SystemsandPerformance
Vice President
Senior Vice President
Jose Venancio P. Batiquin
Ana Liza M. Aleta Vice President
Vice President
Execuve Vice President Strategy and Regulaon
Felino M. Bernardo
Alvin S. Arco First Vice President
Juan Antonio E. Bernad
Sebastian R. Lacson
Mindanao Aairs
Joseph Trillana T. Gonzales
Erramon I. Aboiz
Procurement and Logiscs Power Distribuon Group
Director Asset Management
Rodrigo M. San Pedro, Jr. Vice President Business Development Commercial
Gil G. Cardiel
Human Resources and Quality Power Distribuon Group
Assistant Vice President Geosciences
Raymond Carl R. Roseus Assistant Vice President KeyAccounts
Timothy Joseph P. Abay Assistant Vice President Controller
Bienamer D. Garcia
Ronald Enrico V. Abad
Carlo P. Cruz
Vice President Customer Services
Vice President ProjectDevelopment
Assistant Vice President MarkengServices
Raul C. Lucero
Katrina Michaela D. Calleja
Nina Ylagan-Pedro
Power Distribuon Group
Assistant Vice President HR Operaons, Aracon & Opmizaon
Susan V. Valdez
Susan S. Policarpio
Chief Reputaon and Risk ManagementOcer
Vice President
Vice President Engineering
GovernmentRelaons
Power Distribuon Group
Assistant Vice President Corporate Branding and Communicaon
Manuel R. Lozano
Wilfredo R. Bacareza, Jr.
Mark Albert B. Canlas
Dave Michael V. Valeriano
First Vice President
Vice President Business Development
Assistant Vice President Business Development
Assistant Vice President
Benedick M. Salvador
InvestorRelaons
Assistant Vice President
Yari A. Miralao
Carlos Copernicus S. Payot
Socorro L. Pandol
Vice President Business Development
Assistant Vice President Controller
Assistant Vice President Environmental Management
Power Distribuon Group
Power Generaon Group
Chief Financial Ocer Corporate Informaon Ocer
Ma. Chona Y. Tiu First Vice President
Chief Financial Ocer
Raizza L. Manuel Assistant Vice President
HR Retenon & Systems
Energy Sales (Visayas and Mindanao)
Board Commiees 2014-2015 Board Corporate Governance Commiee
n o i t a r o p r o C r e w o P z i t i o b A
Jon Ramon Aboiz
Carlos C. Ejercito
Xavier J. Aboiz
M. Jasmine S. Oporto
Chairman of the Commiee Vice Chairman
Member of the Commiee Independent Director
Ex-OcioMember SVP - Chief Human Resources Ocer – AEV
Ex-OcioMember Compliance Ocer
Erramon I. Aboiz
Romeo L. Bernardo
Alfonso A. Uy
Member of the Commiee
Member of the Commiee Independent Director
Member of the Commiee Independent Director
Director
Board Audit Commiee Carlos C. Ejercito
Romeo L. Bernardo
Alfonso A. Uy
Antonio R. Moraza
Mikel A. Aboiz
Chairman of the Commiee Independent Director
Member of the Commiee Independent Director
Member of the Commiee Independent Director
Member of the Commiee Director
Member of the Commiee Director
Board Risk and Reputaon Management Commiee
Arturo M. Milan Execuve Vice President Chief Operang Ocer Davao Light and Power Company, Inc.
Rodger S. Velasco
Dante T. Pollescas
Senior Vice President Chief Operang Ocer Cotabato Light and Power Company
Senior Vice President Chief Operang Ocer Subic, Balamban, Mactan, and LiMA EnerZones
Enrique M. Aboiz
Mikel A. Aboiz
Alfonso A. Uy
Susan V. Valdez
Chairman of the Commiee Chairman of the Board
Member of the Commiee Director
Member of the Commiee Independent Director
Ex-OcioMember Chief Reputaon and Risk Management Ocer
Antonio R. Moraza
Carlos C. Ejercito
Manuel R. Lozano
Member of the Commiee
Member of the Commiee Independent Director
Ex-OcioMember Chief Financial Ocer
Director
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Aboitiz Foundation, Inc. Board of Trustees
. c n I , s e r u t n e V y t i u q E z i t i o b A
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Erramon I. Aboitiz
Susan V. Valdez
Xavier Jose M. Aboitiz
Andoni F. Aboitiz
Chairman
President / Trustee
Trustee
Trustee
t r o p e R l a u n n A
Luis Miguel O. Aboitiz
Ma. Aurora F. Tolentino
Sabin M. Aboitiz
Jaime Jose Y. Aboitiz
Stephen G. Paradies
Antonio R. Moraza
Trustee
Independent Trustee
Trustee
Trustee
Treasurer / Trustee
Trustee
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Aboitiz Foundation, Inc. Board of Trustees
. c n I , s e r u t n e V y t i u q E z i t i o b A
Erramon I. Aboitiz
Susan V. Valdez
Xavier Jose M. Aboitiz
Andoni F. Aboitiz
Chairman
President / Trustee
Trustee
Trustee
t r o p e R l a u n n A
Luis Miguel O. Aboitiz
Ma. Aurora F. Tolentino
Sabin M. Aboitiz
Jaime Jose Y. Aboitiz
Stephen G. Paradies
Antonio R. Moraza
Trustee
Independent Trustee
Trustee
Trustee
Treasurer / Trustee
Trustee
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Aboitiz Foundation, Inc.
WeatherPhilippines Foundation, Inc. Board of Trustees
Board of Advisers
Enrique M. Aboitiz
Manuel B. Zamora Jr.
Sabin M. Aboitiz
Dennis Schulze
Chairman
Anton Mari G. Perdices
Tristan Roberto C. Aboitiz
Danel C. Aboitiz
Adviser
Adviser
Adviser
Vice Chairman / Trustee
Susan V. Valdez President / Trustee
Management
Treasurer / Trustee
Trustee
Hans T. Sy
Independent Trustee
Tristan Roberto C. Aboitiz Adviser
. c n I , s e r u t n e V y t i u q E z i t i o b A
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Augusto P. I. Carpio Execuve Vice President Chief Operang Ocer
t r o p e R l a u n n A
Fulgencio S. Factoran, Jr. Independent Trustee
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Aboitiz Foundation, Inc.
WeatherPhilippines Foundation, Inc. Board of Trustees
Board of Advisers
Enrique M. Aboitiz
Manuel B. Zamora Jr.
Sabin M. Aboitiz
Dennis Schulze
Chairman
Anton Mari G. Perdices
Tristan Roberto C. Aboitiz
Danel C. Aboitiz
Adviser
Adviser
Adviser
Vice Chairman / Trustee
Susan V. Valdez President / Trustee
Management
Treasurer / Trustee
Trustee
Hans T. Sy
Independent Trustee
Tristan Roberto C. Aboitiz Adviser
Augusto P. I. Carpio
. c n I , s e r u t n e V y t i u q E z i t i o b A
Execuve Vice President Chief Operang Ocer
t r o p e R l a u n n A
Fulgencio S. Factoran, Jr. Independent Trustee
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WeatherPhilippines Foundation, Inc. Board of Advisers
Ana Aboitiz-Delgado
Liza B. Silerio
Adviser
Genaro V. Lapez
Adviser
Dennis G. Zamora Adviser
Adviser
Maria Monica Araneta Adviser
Management
. c n I , s e r u t n e V y t i u q E z i t i o b A
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Celso Caballero III
Assistant Vice President General Manager
Aboitiz Equity Ventures, Inc. Audited Consolidated Financial Statements
Aboitiz Equity Ventures, Inc. Audited Consolidated Financial Statements
WeatherPhilippines Foundation, Inc. Board of Advisers
Ana Aboitiz-Delgado
Liza B. Silerio
Adviser
Genaro V. Lapez
Adviser
Dennis G. Zamora Adviser
Adviser
Maria Monica Araneta Adviser
Management
. c n I , s e r u t n e V y t i u q E z i t i o b A
Celso Caballero III
Assistant Vice President General Manager
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The Audit Committee Report to the Board of Directors
The Board Audit Commiee Report to the Board of Directors The Board Audit Commiee’s roles and responsibilies are embodied in the Board Audit Commiee Charter approved by the Board of Directors. Its primary funcon is to provide assistance to the Board in fullling its oversight responsibility responsibility to the shareholders relang to: (a) the quality and integrity of the Company’s accounng, auding, legal, ethical and regulatory compliance; (b) risk management; (c) nancial reporng pracces; and (d) corporate governance. Any proposed changes to the Audit Commiee Charter are referred to the Board for approval. Membership As of December 31, 2014, the Board Audit Commiee is composed of ve (5) members, three (3) of whom are independent directors. Jose C. Vitug, a rered Jusce of the Supreme Court (Independent Director) – Chair of the Commiee – is ably assisted by Ay. Raphael Raphael P. M. Lolla (Independent Director), Stephen T. CuUnjieng (Independent Director), Justo A. Orz (Execuve Director) and Roberto E. Aboiz (Non-Execuve Director). Meengs There were four (4) regular Commiee meengs held during the year—March 4, May 6, July 22 and October 28—one (1) special meeng on July 30, and two (2) joint meengs—June 2 and Dec 11—with the Board Risk and Reputaon Management Commiee. Also present in these meengs is the Group Internal Audit Head, the Chief Reputaon and Risk Management Ocer, Ocer, and by invitaon, the AEV Chief Financial Ocer and the AEV Controller. Financial Reports On a high level basis, the Commiee reviewed, discussed, and endorsed for the approval of the Board the quarterly unaudited consolidated nancial statements and the annual audited nancial statements of Aboiz Equity Ventures, Inc., and its Subsidiaries. Included in the review are the Management Discussion and Analysis of Financial Condion and Results of Operaons aer these have been presented and discussed with management, accounng and the company’s independent external auditor, SyCip Gorres Velayo & Co. (SGV)—a member pracce of Ernst & Young (EY) in the Philippines. The acvies of the Audit Commiee were performed in the following context: • That management has the primary responsibility responsibility for the nancial statements and the nancial reporng process; and • That the company’s independent external external auditor is responsible for expressing an opinion on the conformity of the Company’s audited nancial statements with Philippine Financial Reporng Standards. Independent Auditors On July 22, 2014, the Board Audit Commiee endorsed the re-appointment of SyCip Gorres Velayo & Co. (SGV) as the independent external auditor for the company. The overall scope and audit plan of SGV were reviewed and approved during the October 28, 2014, regular Board Audit Commiee meeng. The terms of engagement which covers audit-related services provided by SGV and its related fees were also reviewed and found to be reasonable. The results of the SGV audits and its assessment of the overall quality of the nancial reporng process were discussed. SGV presented the eects of changes in relevant accounng standards and presentaon of nancial statements statements that impact on the reported results. These maers were covered during the rst Board Audit Commiee meeng held the following year on March 5, 2015. The delegaon to the Board of Directors of the appointment of the Company’s external auditor was made upon the recommendaon of the Board Audit Commiee. . c n I , s e r u t n e V y t i u q E z i t i o b A
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Also, in the review of non-audit services provided by independent auditors, the Commiee unanimously concurred/raed the opinion that there is no conict of interest and that the work that Ernst & Young (Indonesia) have been contracted to do for the Company is compable with the general standard of independence for auditors imposed by relevant regulaons. Internal Auditors The Group Internal Audit (GIA) takes the lead in seng the standards, iniaves and overall direcon of the group-wide resident internal audit teams deployed to the dierent business units. It remains to be the single point of contact for the Board Audit Commiee. The restructuring of the internal audit organizaon has proven to be a worthwhile endeavour as the scope and coverage of audits have increased with resident audit teams being able to specialize in areas of business covered by their teams.
All technical audits related to informaon systems and technology are handled by the group internal auditors unl such me that competencies to handle such audits can be transferred to the resident audit teams. Focus areas reviewed in 2014 include informaon technology general controls and soware applicaons reviews. The Commiee reviewed and approved the annual audit program for the year which also covers the adequacy of resources, qualicaons and competency of the sta and independence of the internal auditor. With reference to the IPPF Aribute Standard 1100 which states that “The Internal Audit Acvity must be independent, and internal auditors must be objecve in performing their work”, the Commiee conrms that the internal auditors conducted its responsibilies objecvely and in an unbiased manner. The Commiee further conrms that, to the best of its knowledge and belief, the auditors have no personal or other impairments that prevent them from objecvely planning, conducng, reporng, or otherwise parcipang and reaching independent conclusions in the audit assignments in 2014. Internal audit is organizaonally ly posioned to be independent—administravely independent—administ ravely reporng to the President and Chief Execuve Ocer and funconally reporng to the Board Audit Commiee. Based on the informaon from the results of the audits conducted in 2014 for Aboiz Equity Ventures, Inc., its subsidiaries and alliances, with the contribuon provided by management and other key leaders on the issues raised to their aenon, Internal Audit believes that, overall there is reasonable assurance that the exisng system of internal controls allows for a generally adequate management of idened risks and eecvely supports the improvement of the management of the Company as a whole. Review of the Audit Charter The Commiee reviewed and assessed the current audit charter in its meeng held October 29, 2014 and found it adequate. No modicaon were found to be needed. Self-Assessment The Commiee conducted its annual self-assessment in accordance with the guidelines of SEC Memo Cir. No. 4, series of 2012. The assessment result showed that it fully complied with the requirements set forth in the Audit Charter and met the necessary and most important requirements set by global standards and best pracces. Risk Management The Commiee had two (2) joint meengs with the Board Risk and Reputaon Management Management Commiee in 2014 where the updated results of the Risk Management Plan validaon conducted conducted by GIA, and the resident audit teams were presented. Considering the dynamic nature of risks, this closed-looped process from risk idencaon to risk treatment validaon should be ongoing and connual in order to ensure that risk treatment acvies that the business units commit to do are being done. The ulmate value of this process is to assist the business units in enhancing their capability to manage and monitor its top risks. It is in the joint meengs that the members of the Audit Commiee are apprised of the top key strategic risks consequenal to the Company’s ability to execute its strategies and achieve its business objecves for the following year. High-level risk exposures are presented and discussed as these issues can aect shareholder value and ulmately the viability of the company. company. The signicant potenal impact of these strategic risks warrants a more focused aenon from the board and its directors. As in previous years, the Commiee connues to monitor acon plans and commitments developed by management to address audit issues and to ensure that proposed soluons are workable, strategic and sustainable. Finally, the Commiee has undertaken its acvies to see to it that it connues to deepen its focus on the integrity of nancial reporng, eecveness of internal controls, risk management, governance and compliance within the Aboiz Power group of companies. In behalf of the Commiee,
Jose C. Vitug (Rered Jusce, Supreme Court/Independent Director) Chairman
t r o p e R l a u n n A
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The Audit Committee Report to the Board of Directors
The Board Audit Commiee Report to the Board of Directors The Board Audit Commiee’s roles and responsibilies are embodied in the Board Audit Commiee Charter approved by the Board of Directors. Its primary funcon is to provide assistance to the Board in fullling its oversight responsibility responsibility to the shareholders relang to: (a) the quality and integrity of the Company’s accounng, auding, legal, ethical and regulatory compliance; (b) risk management; (c) nancial reporng pracces; and (d) corporate governance. Any proposed changes to the Audit Commiee Charter are referred to the Board for approval. Membership As of December 31, 2014, the Board Audit Commiee is composed of ve (5) members, three (3) of whom are independent directors. Jose C. Vitug, a rered Jusce of the Supreme Court (Independent Director) – Chair of the Commiee – is ably assisted by Ay. Raphael Raphael P. M. Lolla (Independent Director), Stephen T. CuUnjieng (Independent Director), Justo A. Orz (Execuve Director) and Roberto E. Aboiz (Non-Execuve Director). Meengs There were four (4) regular Commiee meengs held during the year—March 4, May 6, July 22 and October 28—one (1) special meeng on July 30, and two (2) joint meengs—June 2 and Dec 11—with the Board Risk and Reputaon Management Commiee. Also present in these meengs is the Group Internal Audit Head, the Chief Reputaon and Risk Management Ocer, Ocer, and by invitaon, the AEV Chief Financial Ocer and the AEV Controller. Financial Reports On a high level basis, the Commiee reviewed, discussed, and endorsed for the approval of the Board the quarterly unaudited consolidated nancial statements and the annual audited nancial statements of Aboiz Equity Ventures, Inc., and its Subsidiaries. Included in the review are the Management Discussion and Analysis of Financial Condion and Results of Operaons aer these have been presented and discussed with management, accounng and the company’s independent external auditor, SyCip Gorres Velayo & Co. (SGV)—a member pracce of Ernst & Young (EY) in the Philippines. The acvies of the Audit Commiee were performed in the following context: • That management has the primary responsibility responsibility for the nancial statements and the nancial reporng process; and • That the company’s independent external external auditor is responsible for expressing an opinion on the conformity of the Company’s audited nancial statements with Philippine Financial Reporng Standards. Independent Auditors On July 22, 2014, the Board Audit Commiee endorsed the re-appointment of SyCip Gorres Velayo & Co. (SGV) as the independent external auditor for the company. The overall scope and audit plan of SGV were reviewed and approved during the October 28, 2014, regular Board Audit Commiee meeng. The terms of engagement which covers audit-related services provided by SGV and its related fees were also reviewed and found to be reasonable. The results of the SGV audits and its assessment of the overall quality of the nancial reporng process were discussed. SGV presented the eects of changes in relevant accounng standards and presentaon of nancial statements statements that impact on the reported results. These maers were covered during the rst Board Audit Commiee meeng held the following year on March 5, 2015. The delegaon to the Board of Directors of the appointment of the Company’s external auditor was made upon the recommendaon of the Board Audit Commiee. . c n I , s e r u t n e V y t i u q E z i t i o b A
Also, in the review of non-audit services provided by independent auditors, the Commiee unanimously concurred/raed the opinion that there is no conict of interest and that the work that Ernst & Young (Indonesia) have been contracted to do for the Company is compable with the general standard of independence for auditors imposed by relevant regulaons. Internal Auditors The Group Internal Audit (GIA) takes the lead in seng the standards, iniaves and overall direcon of the group-wide resident internal audit teams deployed to the dierent business units. It remains to be the single point of contact for the Board Audit Commiee. The restructuring of the internal audit organizaon has proven to be a worthwhile endeavour as the scope and coverage of audits have increased with resident audit teams being able to specialize in areas of business covered by their teams.
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All technical audits related to informaon systems and technology are handled by the group internal auditors unl such me that competencies to handle such audits can be transferred to the resident audit teams. Focus areas reviewed in 2014 include informaon technology general controls and soware applicaons reviews. The Commiee reviewed and approved the annual audit program for the year which also covers the adequacy of resources, qualicaons and competency of the sta and independence of the internal auditor. With reference to the IPPF Aribute Standard 1100 which states that “The Internal Audit Acvity must be independent, and internal auditors must be objecve in performing their work”, the Commiee conrms that the internal auditors conducted its responsibilies objecvely and in an unbiased manner. The Commiee further conrms that, to the best of its knowledge and belief, the auditors have no personal or other impairments that prevent them from objecvely planning, conducng, reporng, or otherwise parcipang and reaching independent conclusions in the audit assignments in 2014. Internal audit is organizaonally ly posioned to be independent—administravely independent—administ ravely reporng to the President and Chief Execuve Ocer and funconally reporng to the Board Audit Commiee. Based on the informaon from the results of the audits conducted in 2014 for Aboiz Equity Ventures, Inc., its subsidiaries and alliances, with the contribuon provided by management and other key leaders on the issues raised to their aenon, Internal Audit believes that, overall there is reasonable assurance that the exisng system of internal controls allows for a generally adequate management of idened risks and eecvely supports the improvement of the management of the Company as a whole. Review of the Audit Charter The Commiee reviewed and assessed the current audit charter in its meeng held October 29, 2014 and found it adequate. No modicaon were found to be needed. Self-Assessment The Commiee conducted its annual self-assessment in accordance with the guidelines of SEC Memo Cir. No. 4, series of 2012. The assessment result showed that it fully complied with the requirements set forth in the Audit Charter and met the necessary and most important requirements set by global standards and best pracces. Risk Management The Commiee had two (2) joint meengs with the Board Risk and Reputaon Management Management Commiee in 2014 where the updated results of the Risk Management Plan validaon conducted conducted by GIA, and the resident audit teams were presented. Considering the dynamic nature of risks, this closed-looped process from risk idencaon to risk treatment validaon should be ongoing and connual in order to ensure that risk treatment acvies that the business units commit to do are being done. The ulmate value of this process is to assist the business units in enhancing their capability to manage and monitor its top risks. It is in the joint meengs that the members of the Audit Commiee are apprised of the top key strategic risks consequenal to the Company’s ability to execute its strategies and achieve its business objecves for the following year. High-level risk exposures are presented and discussed as these issues can aect shareholder value and ulmately the viability of the company. company. The signicant potenal impact of these strategic risks warrants a more focused aenon from the board and its directors. As in previous years, the Commiee connues to monitor acon plans and commitments developed by management to address audit issues and to ensure that proposed soluons are workable, strategic and sustainable. Finally, the Commiee has undertaken its acvies to see to it that it connues to deepen its focus on the integrity of nancial reporng, eecveness of internal controls, risk management, governance and compliance within the Aboiz Power group of companies. In behalf of the Commiee,
Jose C. Vitug (Rered Jusce, Supreme Court/Independent Director) Chairman
t r o p e R l a u n n A
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Statement of Management’s Responsibility for Financial Statements
SECURITIES AND EXCHANGE COMMISSION SEC Building, EDSA Greenhills Mandaluyong, Metro Manila
STATEMENT OF MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS
The management of Aboitiz Equity Ventures, Inc. is responsible for the preparation and fair presentation of the consolidated financial statements for the years ended December 31, 2014 and 2013, including the additional components attached therein, in accordance with the prescribed financial reporting framework indicated therein. This responsibility includes designing and implementing internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances. The Board of Directors reviews and approves the consolidated financial statements and submit the same to the stockholders. Sycip Gorres Velayo & Co., the independent auditors, appointed by the stockholders for the period December 31, 2014 and 2013 has examined the consolidated financial statements of the company in accordance with Philippine Standards on Auditing, and in its report to stockholders, has expressed its opinion on the fairness of presentation upon completion of such examination.
JON RAMON M. ABOITIZ Chairman of the Board
ERRAMON I. ABOITIZ President & Chief Executive Officer
. c n I , s e r u t n e V y t i u q E z i t i o b A
110
STEPHEN G. PARADIES Senior Vice President - Chief Financial Officer
Signed this 10th day of March, 2015.
t r o p e R l a u n n A
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111
Statement of Management’s Responsibility for Financial Statements
SECURITIES AND EXCHANGE COMMISSION SEC Building, EDSA Greenhills Mandaluyong, Metro Manila
STATEMENT OF MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS
The management of Aboitiz Equity Ventures, Inc. is responsible for the preparation and fair presentation of the consolidated financial statements for the years ended December 31, 2014 and 2013, including the additional components attached therein, in accordance with the prescribed financial reporting framework indicated therein. This responsibility includes designing and implementing internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances. The Board of Directors reviews and approves the consolidated financial statements and submit the same to the stockholders. Sycip Gorres Velayo & Co., the independent auditors, appointed by the stockholders for the period December 31, 2014 and 2013 has examined the consolidated financial statements of the company in accordance with Philippine Standards on Auditing, and in its report to stockholders, has expressed its opinion on the fairness of presentation upon completion of such examination.
JON RAMON M. ABOITIZ Chairman of the Board
ERRAMON I. ABOITIZ President & Chief Executive Officer
. c n I , s e r u t n e V y t i u q E z i t i o b A
STEPHEN G. PARADIES Senior Vice President - Chief Financial Officer
t r o p e R l a u n n A
Signed this 10th day of March, 2015.
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111
Independent Auditors’ Report .
:
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:
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The Stockholders and the Board of Directors Aboitiz Equity Ventures, Inc.
We have audited the accompanying consolidated financial statements of Aboitiz Equity Ventures, Inc. and Subsidiaries, which comprise the consolidated balance sheets as at December 31, 2014 and 2013, and the consolidated statements of income, statements of comprehensive income, statements of changes in equity and statements of cash flows for each of the three years in the period ended December 31, 2014, and a summary of significant accounting policies and other explanatory information.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Aboitiz Equity Ventures, Inc. a nd Subsidiaries as at December 31, 2014 and 2013, and their financial performance and their cash flows fo r each of the three years in t he period ended December 31, 2014 in accordance with Philippine Fi nancial Reporting Standards.
SYCIP GORRES VELAYO & CO.
Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Philippine Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Philippine Standards Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
Leovina Mae V. Chu Partner CPA Certificate No. 99910 SEC Accreditation No. 1199-A (Group A), March 15, 2012, valid until March 31, 2015 Tax Identification No. 209-316-911 BIR Accreditation No. 08-001998-96-2015, January 5, 2015, valid until January 4, 2018 PTR No. 4751341, January 5, 2015, Makati City March 10, 2015
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material material misstatement of the consolidated consolidated financial statements, whether due to fraud or error. error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. . c n I , s e r u t n e V y t i u q E z i t i o b A
112
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
t r o p e R l a u n n A
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Independent Auditors’ Report .
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:
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Opinion
The Stockholders and the Board of Directors Aboitiz Equity Ventures, Inc.
We have audited the accompanying consolidated financial statements of Aboitiz Equity Ventures, Inc. and Subsidiaries, which comprise the consolidated balance sheets as at December 31, 2014 and 2013, and the consolidated statements of income, statements of comprehensive income, statements of changes in equity and statements of cash flows for each of the three years in the period ended December 31, 2014, and a summary of significant accounting policies and other explanatory information.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Aboitiz Equity Ventures, Inc. a nd Subsidiaries as at December 31, 2014 and 2013, and their financial performance and their cash flows fo r each of the three years in t he period ended December 31, 2014 in accordance with Philippine Fi nancial Reporting Standards.
SYCIP GORRES VELAYO & CO.
Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Philippine Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Philippine Standards Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
Leovina Mae V. Chu Partner CPA Certificate No. 99910 SEC Accreditation No. 1199-A (Group A), March 15, 2012, valid until March 31, 2015 Tax Identification No. 209-316-911 BIR Accreditation No. 08-001998-96-2015, January 5, 2015, valid until January 4, 2018 PTR No. 4751341, January 5, 2015, Makati City March 10, 2015
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material material misstatement of the consolidated consolidated financial statements, whether due to fraud or error. error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. . c n I , s e r u t n e V y t i u q E z i t i o b A
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
t r o p e R l a u n n A
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113
Independent Auditors’ Report on Supplementary Schedules .
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Consolidated Balance Sheets
-
Aboitiz Equity Ventures, Inc. and Subsidiaries Consolidated Balance Sheets (Amounts in Thousands) December 31 2014
2013
=50,481,566 = P50,481,566 16,639,775 7,664,499 53,500 4,041,372 78,880,712
=36,118,190 P =36,118,190 17,122,945 8,759,165 30,900 3,900,052 65,931,252
292,414 52,267,310 126,203,724 1,970,211 4,441,417 3,400,354 64,244 133,882 59,044 350,005 1,550,106 11,383,133 202,115,844
405,544 47,906,352 112,721,907 2,041,356 3,940,854 3,663,275 64,980 99,996 – 610,314 1,334,878 8,367,367 181,156,823
ASSETS
The Stockholders and the Board of Directors Aboitiz Equity Ventures, Inc. nd 32 Street, Bonifacio Global City Taguig City, Metro Manila, Philippines
We have audited in accordance with Philippine Standards on Auditing, the consolidated financial statements of Aboitiz Equity Ventures, Inc. and Subsidiaries included in this Form 17-A and have issued our report thereon dated March 10, 2015. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed in the Index to Financial Statements and Supplementary Schedules are the responsibility of the Company’s management. These schedules are presented for purposes of complying with the Securities Regulation Code Rule 68, as amended (2011) and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
SYCIP GORRES VELAYO & CO.
Current Assets Cash and cash equivalents (Note 4) Trade and other receivables (Note 5) Inventories (Note 6) Derivative asset (Note 36) Other current assets (Notes 7 and 8) Total Current Assets
Noncurrent Assets Trade receivables- net of current current portion (Note 5) Investments and advances(Note 10) Property, plant and equipment (Notes 13and 19) Land and improvements (Note 13) Investment properties (Notes 14and 29) Intangible Intangible asset - service service concession concession rights (Note 15) Available-for-sale (AFS) investments (Note 3) Net pension assets assets (Note30) Derivative asset asset - net of current portion(Note 36) Deferred income tax assets (Note (Note 31) Goodwill (Notes 9 and 12) Other noncurrent assets (Notes 8 and 16) Total Nonc urrent Assets
TOTAL ASSETS
Leovina Mae V. Chu Partner CPA Certificate No. 99910 SEC Accreditation No. 1199-A (Group A), March 15, 2012, valid until March 31, 2015 Tax Identification No. 209-316-911 209-316-911 BIR Accreditation No. 08-001998-96-2015, January 5, 2015, valid until January 4, 2018 PTR No. 4751341, January 5, 2015, Makati City March 10, 2015 . c n I , s e r u t n e V y t i u q E z i t i o b A
114
=280,996,556 =P280,996,556
=247,088,075 P =247,088,075
LIABILITIES AND EQUITY Current Liabilities Bank loans (Note 17) Current portions of: Long-term debts (Note 19) Long-term obligation on Power Distribution System (PDS) (Note 15) Obligations under finance lease (Notes 13 and 22) Trade and other payables (Notes 18, 34and 38) Income tax payable Derivative liabilities (Note 36) Total Current Liab ilities
(Forward)
=7,343,700 = P7,343,700
=3,959,509 P =3,959,509
2,907,302
1,216,469
40,000
40,000
1,971,739 15,631,565 694,604 – 28,588,910
780,905 18,499,480 444,290 23 24,940,676 t r o p e R l a u n n A
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Independent Auditors’ Report on Supplementary Schedules .
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Consolidated Balance Sheets
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Aboitiz Equity Ventures, Inc. and Subsidiaries Consolidated Balance Sheets (Amounts in Thousands) December 31 2014
2013
=50,481,566 = P50,481,566 16,639,775 7,664,499 53,500 4,041,372 78,880,712
=36,118,190 P =36,118,190 17,122,945 8,759,165 30,900 3,900,052 65,931,252
292,414 52,267,310 126,203,724 1,970,211 4,441,417 3,400,354 64,244 133,882 59,044 350,005 1,550,106 11,383,133 202,115,844
405,544 47,906,352 112,721,907 2,041,356 3,940,854 3,663,275 64,980 99,996 – 610,314 1,334,878 8,367,367 181,156,823
ASSETS Current Assets Cash and cash equivalents (Note 4) Trade and other receivables (Note 5) Inventories (Note 6) Derivative asset (Note 36) Other current assets (Notes 7 and 8) Total Current Assets
The Stockholders and the Board of Directors Aboitiz Equity Ventures, Inc. nd 32 Street, Bonifacio Global City Taguig City, Metro Manila, Philippines
We have audited in accordance with Philippine Standards on Auditing, the consolidated financial statements of Aboitiz Equity Ventures, Inc. and Subsidiaries included in this Form 17-A and have issued our report thereon dated March 10, 2015. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed in the Index to Financial Statements and Supplementary Schedules are the responsibility of the Company’s management. These schedules are presented for purposes of complying with the Securities Regulation Code Rule 68, as amended (2011) and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
SYCIP GORRES VELAYO & CO.
Noncurrent Assets Trade receivables- net of current current portion (Note 5) Investments and advances(Note 10) Property, plant and equipment (Notes 13and 19) Land and improvements (Note 13) Investment properties (Notes 14and 29) Intangible Intangible asset - service service concession concession rights (Note 15) Available-for-sale (AFS) investments (Note 3) Net pension assets assets (Note30) Derivative asset asset - net of current portion(Note 36) Deferred income tax assets (Note (Note 31) Goodwill (Notes 9 and 12) Other noncurrent assets (Notes 8 and 16) Total Nonc urrent Assets
TOTAL ASSETS
Leovina Mae V. Chu Partner CPA Certificate No. 99910 SEC Accreditation No. 1199-A (Group A), March 15, 2012, valid until March 31, 2015 Tax Identification No. 209-316-911 209-316-911 BIR Accreditation No. 08-001998-96-2015, January 5, 2015, valid until January 4, 2018 PTR No. 4751341, January 5, 2015, Makati City
=280,996,556 =P280,996,556
=247,088,075 P =247,088,075
LIABILITIES AND EQUITY Current Liabilities Bank loans (Note 17) Current portions of: Long-term debts (Note 19) Long-term obligation on Power Distribution System (PDS) (Note 15) Obligations under finance lease (Notes 13 and 22) Trade and other payables (Notes 18, 34and 38) Income tax payable Derivative liabilities (Note 36) Total Current Liab ilities
March 10, 2015 . c n I , s e r u t n e V y t i u q E z i t i o b A
=7,343,700 = P7,343,700
=3,959,509 P =3,959,509
2,907,302
1,216,469
40,000
40,000
1,971,739 15,631,565 694,604 – 28,588,910
780,905 18,499,480 444,290 23 24,940,676 t r o p e R l a u n n A
(Forward)
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Consolidated Statements of Income Aboitiz Equity Ventures, Inc. and Subsidiaries Consolidated Statements of Income (Amounts in Thousands, Except Earnings Per Share Amounts) December 31 2014 Noncurrent Liabilities Noncurrent portions of: Obligations under finance lease (Notes 13 and 22) Long-term debts (Note 19) Long-term obligations on PDS (Note 15) Trade payables (Notes 18and 34) Customers’ deposits (Note (Note 20) Asset retirement obligation (Note 21) Deferred income tax liabilities (Note 31) Net pension liability (Note 30) Tot al N oncurrent L iabilities Tot al L iabilities
Equity Attributable to Equity Holders of the Pa rent Capital stock (Note 23) Additional paid-in capital(Note 23) Other equity reserves: Gain on dilution (Note 2) Excess of book value over acquisition cost of an acquired subsidiary (Note 9) Acquisition of non-controlling interests(Note 2) Other components of equity: Net unrealized mark-to-market gains on AFS investments Cumulative translation adjustments (Note 36) Actuarial losses on defined benefit plans (Note 30) Share in actuarial losses on defined benefit plans of associates (Note 10) Share in cumulative translation adjustments of associates (Note 10) Share in net unrealized mark-to-market gains (losses) on AFS investments of an associate (Note 10) Retained earnings (Note 24) Treasury stock at cost (Note 23) N on-c ontr olling Int erests T otal Equity . c n I , s e r u t n e V y t i u q E z i t i o b A
116
T OTAL L IABIL ITIES AN D EQ UITY See accompanying Notes to Consolidated Financial Statements.
=52,489,282 = P52,489,282 53,814,682 216,015 345,915 5,943,305 2,353,250 1,760,139 550,094 117,472,682 146,061, 592
=54,421,858 P =54,421,858 34,984,519 223,865 465,104 5,418,458 2,008,669 1,370,814 704,640 99,597,927 124,538,603
5,694,600 6,911,044
5,694,600 6,110,957
5,376,176
5,376,176
469,540 (1,577,075)
469,540 (1,262,862)
14,627 35,533 (708,448)
Years Ended December 31
2013
7,881 (14,534)
2014
2013
2012
=86,136,648 P =86,136,648 17,862,179 3,267,741 1,878,236 252,028 – 470,458 109,867,290
P = 71 71,810,961 15, 12 125 ,1 15 15 1,760,573 1,306,475 714,428 – 158,742 90, 87 876 ,2 ,2 94 94
P =61,837,754 =61,837,754 1 4, 4, 50 506, 72 723 237,553 1,181,06 1 416,387 2,202,204 636,118 81 ,0 17 17, 80 800
50,870,515 14,722,760 17,383,920 2,235,576 – 108,789 85,321,560
42 ,3 57 57, 79 799 13 ,3 00 00, 39 399 12 ,8 44 44, 46 466 1,078,392 – 71,755 69, 65 652 ,8 ,8 11 11
31, 89 89 3, 3, 72 729 12, 68 68 6, 6, 20 202 12, 43 43 9, 9, 20 203 187,029 776,187 90,193 58 ,0 72 72, 54 543
OPERAT ING PROFIT Share in net earnings of associates (Note 10) Interest expense (Notes (Notes 22, 34and 35) Interest income (Notes 4, 34and 35) Other incomeincome- net (Notes (Notes 29 and 34)
24, 545, 730 7,244,241 (6,696,445) 591,136 1,906,530
21, 22 223 ,4 ,4 83 83 10, 59 596 ,5 ,5 77 77 (5 5,, 74 74 8, 8, 23 23 5) 5) 481,461 541,503
22 ,9 45 45, 25 257 13 ,3 22 22, 14 144 (7 7,, 57 57 1, 1, 44 44 6) 6) 1,008,811 2,352,476
IN COME BEFORE INCOME TAX
27, 591, 192
27, 09 094 ,7 ,7 89 89
32 ,0 57 57, 24 242
4,026,326
886,552
1,910,604
NET IN COME
=23,564,866 = P23,564,866
P = 26 26,208,237
P =30,146,638 =30,146,638
ATTRIBUTABLE TO: Equity holders of the parent Non-controlling interests
=18,380,620 P =18,380,620 5,184,246
P = 21,027,470 5,180,767
P =23,964,674 =23,964,674 6,181,964
=23,564,866 P =23,564,866
P = 26,208,2 37
P =30,146,638 =30,146,638
=3.324 P =3.324
P = 3. 808
P =4.340 =4.340
REVENUES (Note REVENUES (Note 25) Sale of: Power and electricity Goods Real estate (Notes 13and 25) Fair value of swine (Note 8) Service fees (Note 38) Bank revenues revenues (Note (Note 9) Others (Note 34)
COSTS AND EXPENSES Cost of generated and purchased power (Notes 5, 26, 27 and 38) Cost of goods sold (Notes 6 and 27) Operating expenses (Notes 27, 34, 38 and 39) Cost of real estate sales (Note 6) Bank interest expense (Note 9) Overhead expenses (Note 27)
(857,602) PROVISION FOR INCOME TAX (Note TAX (Note 31)
(315,444)
(156,925)
(277,293)
(295,546)
(1,496,305) 94,995,596 (1,178,397) 107,944,154 26,990, 810 134,934, 964
(3,403,534) 86,554,345 (1,295,163) 96,927,333 25,622,139 122,549,472
=280,996,556 = P280,996,556
=247,088,075 P =247,088,075
EARNINGS PER SHARE (Note SHARE (Note 32) Basic and diluted, for net income for the year attributable to ordinary equity holders of the parent See accompanying Notes to Consolidated Financial Statements.
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Consolidated Statements of Income Aboitiz Equity Ventures, Inc. and Subsidiaries Consolidated Statements of Income (Amounts in Thousands, Except Earnings Per Share Amounts) December 31 2014 Noncurrent Liabilities Noncurrent portions of: Obligations under finance lease (Notes 13 and 22) Long-term debts (Note 19) Long-term obligations on PDS (Note 15) Trade payables (Notes 18and 34) Customers’ deposits (Note (Note 20) Asset retirement obligation (Note 21) Deferred income tax liabilities (Note 31) Net pension liability (Note 30) Tot al N oncurrent L iabilities Tot al L iabilities
Equity Attributable to Equity Holders of the Pa rent Capital stock (Note 23) Additional paid-in capital(Note 23) Other equity reserves: Gain on dilution (Note 2) Excess of book value over acquisition cost of an acquired subsidiary (Note 9) Acquisition of non-controlling interests(Note 2) Other components of equity: Net unrealized mark-to-market gains on AFS investments Cumulative translation adjustments (Note 36) Actuarial losses on defined benefit plans (Note 30) Share in actuarial losses on defined benefit plans of associates (Note 10) Share in cumulative translation adjustments of associates (Note 10) Share in net unrealized mark-to-market gains (losses) on AFS investments of an associate (Note 10) Retained earnings (Note 24) Treasury stock at cost (Note 23) N on-c ontr olling Int erests T otal Equity . c n I , s e r u t n e V y t i u q E z i t i o b A
116
T OTAL L IABIL ITIES AN D EQ UITY See accompanying Notes to Consolidated Financial Statements.
=52,489,282 = P52,489,282 53,814,682 216,015 345,915 5,943,305 2,353,250 1,760,139 550,094 117,472,682 146,061, 592
=54,421,858 P =54,421,858 34,984,519 223,865 465,104 5,418,458 2,008,669 1,370,814 704,640 99,597,927 124,538,603
5,694,600 6,911,044
5,694,600 6,110,957
5,376,176
5,376,176
469,540 (1,577,075)
469,540 (1,262,862)
14,627 35,533 (708,448)
Years Ended December 31
2013
7,881 (14,534)
2014
2013
2012
=86,136,648 P =86,136,648 17,862,179 3,267,741 1,878,236 252,028 – 470,458 109,867,290
P = 71 71,810,961 15, 12 125 ,1 15 15 1,760,573 1,306,475 714,428 – 158,742 90, 87 876 ,2 ,2 94 94
P =61,837,754 =61,837,754 1 4, 4, 50 506, 72 723 237,553 1,181,06 1 416,387 2,202,204 636,118 81 ,0 17 17, 80 800
50,870,515 14,722,760 17,383,920 2,235,576 – 108,789 85,321,560
42 ,3 57 57, 79 799 13 ,3 00 00, 39 399 12 ,8 44 44, 46 466 1,078,392 – 71,755 69, 65 652 ,8 ,8 11 11
31, 89 89 3, 3, 72 729 12, 68 68 6, 6, 20 202 12, 43 43 9, 9, 20 203 187,029 776,187 90,193 58 ,0 72 72, 54 543
OPERAT ING PROFIT Share in net earnings of associates (Note 10) Interest expense (Notes (Notes 22, 34and 35) Interest income (Notes 4, 34and 35) Other incomeincome- net (Notes (Notes 29 and 34)
24, 545, 730 7,244,241 (6,696,445) 591,136 1,906,530
21, 22 223 ,4 ,4 83 83 10, 59 596 ,5 ,5 77 77 (5 5,, 74 74 8, 8, 23 23 5) 5) 481,461 541,503
22 ,9 45 45, 25 257 13 ,3 22 22, 14 144 (7 7,, 57 57 1, 1, 44 44 6) 6) 1,008,811 2,352,476
IN COME BEFORE INCOME TAX
27, 591, 192
27, 09 094 ,7 ,7 89 89
32 ,0 57 57, 24 242
4,026,326
886,552
1,910,604
NET IN COME
=23,564,866 = P23,564,866
P = 26 26,208,237
P =30,146,638 =30,146,638
ATTRIBUTABLE TO: Equity holders of the parent Non-controlling interests
=18,380,620 P =18,380,620 5,184,246
P = 21,027,470 5,180,767
P =23,964,674 =23,964,674 6,181,964
=23,564,866 P =23,564,866
P = 26,208,2 37
P =30,146,638 =30,146,638
=3.324 P =3.324
P = 3. 808
P =4.340 =4.340
REVENUES (Note REVENUES (Note 25) Sale of: Power and electricity Goods Real estate (Notes 13and 25) Fair value of swine (Note 8) Service fees (Note 38) Bank revenues revenues (Note (Note 9) Others (Note 34)
COSTS AND EXPENSES Cost of generated and purchased power (Notes 5, 26, 27 and 38) Cost of goods sold (Notes 6 and 27) Operating expenses (Notes 27, 34, 38 and 39) Cost of real estate sales (Note 6) Bank interest expense (Note 9) Overhead expenses (Note 27)
(857,602) PROVISION FOR INCOME TAX (Note TAX (Note 31)
(315,444)
(156,925)
(277,293)
(295,546)
(1,496,305) 94,995,596 (1,178,397) 107,944,154 26,990, 810 134,934, 964
(3,403,534) 86,554,345 (1,295,163) 96,927,333 25,622,139 122,549,472
=280,996,556 = P280,996,556
=247,088,075 P =247,088,075
EARNINGS PER SHARE (Note SHARE (Note 32) Basic and diluted, for net income for the year attributable to ordinary equity holders of the parent See accompanying Notes to Consolidated Financial Statements.
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117
Cash Flows Consolidated Statements of Cash Aboitiz Equity Ventures, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Amounts in Thousands)
Years Ended December 31
Years Ended December 31 2014
2013
CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Interest expense(Note 35) Depreciation and amortization (Note 27) Net unrealized foreign exchange losses (gains) Provision for decline in value of project costs and various assets Provision for impairment loss on investments and advances (Note 10) Unrealizedmark-to-m Unrealizedmark-to-marke arkett losses (gains) (gains) on derivatives Share in net earnings of associates (Note 10) Gain on sale of: (Notes 9, 10 and 29) Investment in subsidiary and associate Property, plant and equipment AFS investments Interest income Net unrealized valuation gainon investment property Dividend income (Note 29) Gain on remeasurement in step acquisition (Note 9) Write-off of goodwill on investment (Note 12) Gain on redemption of shares of an associate (Note 10) Operating income before working capital changes Decrease (increase) in: Trade and other receivables Inventories Other current assets Increase(decrease Increase(decrease)) in: Trade and other payables es (Note 9) Customers’ deposits Net cash generated from operations Service fees paid Income and final taxes paid Net cash flows from operating activities . c n I , s e r u t n e V y t i u q E z i t i o b A
122
CASH FLOWS FROM INVESTING ACTIVITIES Cash dividends received (Note 10) Disposal of a subsidiary, net of cash disposed (Note 9) Interest received Proceeds from sale of common shares and redemption of preferred shares of associates (Note 10) Proceeds from sale of: Property, plant and equipment AFS investments (Forward)
=27,591,192 P =27,591,192
P =27,094,789
P =32,057,242
6,696,445 5,160,897 188,901
5,748,23 5 4,339,68 3 2, 11 110, 91 91 0
64,677
103,514
875,541
2,834
657,510
−
897 (7,244,241)
7,571,446 3,974,281 ( 1, 1,6 70 70, 53 536 )
(394) (10, (10,59 596, 6,57 577) 7)
(1,826) (13, (13,32 322, 2,14 144) 4)
(638,878) (15,958) 23 (591,136)
(1,294,659) (47,291)
−
(5,001) (89)
(20,884) (338) (964,600) 368,904
− – – 31,210,563
− (4 48 8 1, 1, 46 46 0) 0)
2014
2013
2012
(P =16,651,075) =16,651,075) (1,400,685) (200,083) (1,173) (2,285,272)
(P =17,335,118) =17,335,118) (2,058,015) (617,608) – (1 1,, 25 25 2, 2, 45 45 3) 3)
(P =11,291,424) =11,291,424) (881,242) (515,761) – (1 1,, 42 42 8, 8, 39 39 6) 6)
(1,229,760)
(8 84 4 7, 7, 93 93 4) 4)
(3 3,, 19 19 1, 1, 73 73 1) 1)
(36,286) (14,423,247)
(41,584) (12,561,540)
(100,101) (913,190)
22,788,325
28,976,900
5,819,121
(2,002,259) (6,970,625) – 3,666,100
(12, (12,88 888, 8,61 615) 5) (6 6,, 72 72 2, 2, 93 93 9) 9) (62,140) ( 3, 3, 71 712, 79 79 1) 1)
(10, (10,85 854, 4,56 568) 8) (2 2,, 47 47 6, 6, 22 22 1) 1) (31,070) 1, 28 281, 53 53 4
(9,939,369)
(1 11 1 ,0 ,0 43 43 ,7 ,7 44 44 )
(8 8,, 72 72 4, 4, 55 55 8) 8)
(3,752,913) (2,033,042) (1,010,045) 916,853 1,663,025
(3 3,, 93 93 0, 0, 35 35 4) 4) (9 96 6 8, 8, 92 92 5) 5) (84,018) – (10, (10,43 436, 6,62 626) 6)
(2 2,, 90 90 6, 6, 98 98 1) 1) (1 1,, 80 80 0, 0, 87 87 7) 7) (638,728) – (20, (20,33 332, 2,34 348) 8)
14,344,238
2,345,515
4,227,901
19,138
42,144
CASH AND CASH EQUIVALENTS AT BEG INNING OF YEAR
36,118,190
3 3, 3, 73 730, 53 53 1
2 9, 9, 54 543, 49 492
CASH AND CASH EQUIVALENTS AT END OF YEAR (Note 4)
=50,481,566 P =50,481,566
P = 36,118,190
P =33,730,531 =33,730,531
2012
(24,103) (30,956) (1 1,, 00 00 8, 8, 81 81 1) 1)
− (562)
− −
– 2 7, 7, 01 017, 34 342
(27,095) 2 8, 8, 39 392, 47 477
(5,034) 1,514,708 (560,495)
(3 3,, 92 92 3, 3, 82 82 8) 8) (1,488,493) (1,124,068)
(4 4,, 54 54 4, 4, 84 84 5) 5) 126,717 (118,974)
(2,600,976) 605,996 30,164,762 (40,000) (3,020,302) 27,104,460
3,710,85 5 2,921,52 5 2 7, 7, 11 113, 33 333 (40,000) (1 1,, 72 72 9, 9, 65 65 2) 2) 2 5, 5, 34 343, 68 681
2,990,316 262,872 2 7, 7, 10 108, 56 563 (40,000) (1 1,, 59 59 5, 5, 12 12 4) 4) 2 5, 5, 47 473, 43 439
5,957,286 254,343 506,094
5, 24 248, 48 48 2 3,418,63 6 427,767
1 4, 4, 81 811, 41 410 – 1,040,179
637,732
340,430
574,401
25,176 456
144,057 11,800
40,886 28,589
Additions to: Property, plant and equipmentand investment properties (Notes 13 and 14) Investmentsin Investmentsin and advancesto advancesto associates(Note associates(Note 10) Land and improvements (Note 13) AFS investments Increase in other noncurrent assets Acquisition through business combination, net of cash acquired (Note 9) Increase in intangible asset- service concession concession rights (Note 15) Cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from availment availment of long-term debts- net of transaction costs (Note 19) Payments of: Long-term debts(Note 19) Obligations under finance lease (Note 21) Payable to preferred shareholder of a subsidiary Net proceeds from (settlements of) bank loans Cash dividends paid to equity holders of the parent (Note 25) Cash dividends paid and otherchanges to non-controlling interest Interest Interest paid Acquisition of non-controlling interests (Note 9) Re-issuance of treasury shares Net cash flows from(used in) financing financing activities activities NET INCREASE IN CASH AND CAS H EQUIVALENTS EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALEN TS
See accompanying Notes to Consolidated Financial Statements.
(40,862)
t r o p e R l a u n n A
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Cash Flows Consolidated Statements of Cash Aboitiz Equity Ventures, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Amounts in Thousands)
Years Ended December 31
Years Ended December 31 2014
2013
CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Interest expense(Note 35) Depreciation and amortization (Note 27) Net unrealized foreign exchange losses (gains) Provision for decline in value of project costs and various assets Provision for impairment loss on investments and advances (Note 10) Unrealizedmark-to-m Unrealizedmark-to-marke arkett losses (gains) (gains) on derivatives Share in net earnings of associates (Note 10) Gain on sale of: (Notes 9, 10 and 29) Investment in subsidiary and associate Property, plant and equipment AFS investments Interest income Net unrealized valuation gainon investment property Dividend income (Note 29) Gain on remeasurement in step acquisition (Note 9) Write-off of goodwill on investment (Note 12) Gain on redemption of shares of an associate (Note 10) Operating income before working capital changes Decrease (increase) in: Trade and other receivables Inventories Other current assets Increase(decrease Increase(decrease)) in: Trade and other payables es (Note 9) Customers’ deposits Net cash generated from operations Service fees paid Income and final taxes paid Net cash flows from operating activities . c n I , s e r u t n e V y t i u q E z i t i o b A
CASH FLOWS FROM INVESTING ACTIVITIES Cash dividends received (Note 10) Disposal of a subsidiary, net of cash disposed (Note 9) Interest received Proceeds from sale of common shares and redemption of preferred shares of associates (Note 10) Proceeds from sale of: Property, plant and equipment AFS investments
=27,591,192 P =27,591,192
P =27,094,789
P =32,057,242
6,696,445 5,160,897 188,901
5,748,23 5 4,339,68 3 2, 11 110, 91 91 0
64,677
103,514
875,541
2,834
657,510
−
897 (7,244,241)
7,571,446 3,974,281 ( 1, 1,6 70 70, 53 536 )
(394) (10, (10,59 596, 6,57 577) 7)
(1,826) (13, (13,32 322, 2,14 144) 4)
(638,878) (15,958) 23 (591,136)
(1,294,659) (47,291)
−
(5,001) (89)
(20,884) (338) (964,600) 368,904
− – – 31,210,563
− (4 48 8 1, 1, 46 46 0) 0)
2014
2012
(24,103) (30,956) (1 1,, 00 00 8, 8, 81 81 1) 1)
− (562)
− −
– 2 7, 7, 01 017, 34 342
(27,095) 2 8, 8, 39 392, 47 477
(5,034) 1,514,708 (560,495)
(3 3,, 92 92 3, 3, 82 82 8) 8) (1,488,493) (1,124,068)
(4 4,, 54 54 4, 4, 84 84 5) 5) 126,717 (118,974)
(2,600,976) 605,996 30,164,762 (40,000) (3,020,302) 27,104,460
3,710,85 5 2,921,52 5 2 7, 7, 11 113, 33 333 (40,000) (1 1,, 72 72 9, 9, 65 65 2) 2) 2 5, 5, 34 343, 68 681
2,990,316 262,872 2 7, 7, 10 108, 56 563 (40,000) (1 1,, 59 59 5, 5, 12 12 4) 4) 2 5, 5, 47 473, 43 439
5,957,286 254,343 506,094
5, 24 248, 48 48 2 3,418,63 6 427,767
1 4, 4, 81 811, 41 410 – 1,040,179
637,732
340,430
574,401
25,176 456
144,057 11,800
40,886 28,589
Additions to: Property, plant and equipmentand investment properties (Notes 13 and 14) Investmentsin Investmentsin and advancesto advancesto associates(Note associates(Note 10) Land and improvements (Note 13) AFS investments Increase in other noncurrent assets Acquisition through business combination, net of cash acquired (Note 9) Increase in intangible asset- service concession concession rights (Note 15) Cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from availment availment of long-term debts- net of transaction costs (Note 19) Payments of: Long-term debts(Note 19) Obligations under finance lease (Note 21) Payable to preferred shareholder of a subsidiary Net proceeds from (settlements of) bank loans Cash dividends paid to equity holders of the parent (Note 25) Cash dividends paid and otherchanges to non-controlling interest Interest Interest paid Acquisition of non-controlling interests (Note 9) Re-issuance of treasury shares Net cash flows from(used in) financing financing activities activities NET INCREASE IN CASH AND CAS H EQUIVALENTS EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALEN TS
2013
2012
(P =16,651,075) =16,651,075) (1,400,685) (200,083) (1,173) (2,285,272)
(P =17,335,118) =17,335,118) (2,058,015) (617,608) – (1 1,, 25 25 2, 2, 45 45 3) 3)
(P =11,291,424) =11,291,424) (881,242) (515,761) – (1 1,, 42 42 8, 8, 39 39 6) 6)
(1,229,760)
(8 84 4 7, 7, 93 93 4) 4)
(3 3,, 19 19 1, 1, 73 73 1) 1)
(36,286) (14,423,247)
(41,584) (12,561,540)
(100,101) (913,190)
22,788,325
28,976,900
5,819,121
(2,002,259) (6,970,625) – 3,666,100
(12, (12,88 888, 8,61 615) 5) (6 6,, 72 72 2, 2, 93 93 9) 9) (62,140) ( 3, 3, 71 712, 79 79 1) 1)
(10, (10,85 854, 4,56 568) 8) (2 2,, 47 47 6, 6, 22 22 1) 1) (31,070) 1, 28 281, 53 53 4
(9,939,369)
(1 11 1 ,0 ,0 43 43 ,7 ,7 44 44 )
(8 8,, 72 72 4, 4, 55 55 8) 8)
(3,752,913) (2,033,042) (1,010,045) 916,853 1,663,025
(3 3,, 93 93 0, 0, 35 35 4) 4) (9 96 6 8, 8, 92 92 5) 5) (84,018) – (10, (10,43 436, 6,62 626) 6)
(2 2,, 90 90 6, 6, 98 98 1) 1) (1 1,, 80 80 0, 0, 87 87 7) 7) (638,728) – (20, (20,33 332, 2,34 348) 8)
14,344,238
2,345,515
4,227,901
19,138
42,144
CASH AND CASH EQUIVALENTS AT BEG INNING OF YEAR
36,118,190
3 3, 3, 73 730, 53 53 1
2 9, 9, 54 543, 49 492
CASH AND CASH EQUIVALENTS AT END OF YEAR (Note 4)
=50,481,566 P =50,481,566
P = 36,118,190
P =33,730,531 =33,730,531
See accompanying Notes to Consolidated Financial Statements.
(40,862)
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(Forward)
122
123
Investor Information Head Oce:
NAC Tower Tower,, 32nd Street, Bonifacio Global City, 1634 Taguig, Metro Manila , Philippines Tel (632) 886.2800 | Fax (632) 886.2407
Cebu Oce:
Aboiz Corporate Center, Gov. Manuel A. Cuenco Avenue Kasambagan, 6000 Cebu City, Philippines Tel (6332) 411.1800 | Fax (6332) 231.4037
Common Stock The Company’s common stock is listed and traded on the Philippine Stock Exchange. Stockholders’ Meeng The Company’s regular stockholders’ stockholders’ meeng is held on the third Monday of May of every year. Stockholder Services and Assistance The Hongkong and Shanghai Banking Corporaon, Ltd. (HSBC) serves as the Company’s stock transfer agent registrar. For maers concerning dividend payments, account status, lost or damaged stock cercates,, change of address, please write or call: cercates THE HONGKONG AND SHANGHAI BANKING CORPORATION, CORPORATION, LIMITED 7/F HSBC Centre, 3058 Fih Avenue, West Bonifacio Global City Taguig City 1634, Philippines Telephone Tele phone No.: (632) 581.7594 | (632) 581.7524 Fax No.: (632) 755.5548 Contact Person: Mr. Mike Sison -
[email protected] Ms. Rosh Oliva - stkmnl@hsbc stkmnl@hsbc .com.ph AEV welcomes inquiries from instuonal investors, analysts, and the nancial community. Please write or call:
Investor Relaons Aboiz Equity Ventures, Inc. Mr. Dave Michael Valeriano Mr. Aristo de Borja Tel. No. (63-2) 886-2423 Fax No. (63-2) 817-3560 Email: aev_investor@aboiz.com Website: www.aboiz.com
Aboitiz Power Corporation Audited Consolidated Financial Statements
Aboitiz Power Corporation Audited Consolidated Financial Statements
Investor Information Head Oce:
NAC Tower Tower,, 32nd Street, Bonifacio Global City, 1634 Taguig, Metro Manila , Philippines Tel (632) 886.2800 | Fax (632) 886.2407
Cebu Oce:
Aboiz Corporate Center, Gov. Manuel A. Cuenco Avenue Kasambagan, 6000 Cebu City, Philippines Tel (6332) 411.1800 | Fax (6332) 231.4037
Common Stock The Company’s common stock is listed and traded on the Philippine Stock Exchange. Stockholders’ Meeng The Company’s regular stockholders’ stockholders’ meeng is held on the third Monday of May of every year. Stockholder Services and Assistance The Hongkong and Shanghai Banking Corporaon, Ltd. (HSBC) serves as the Company’s stock transfer agent registrar. For maers concerning dividend payments, account status, lost or damaged stock cercates,, change of address, please write or call: cercates THE HONGKONG AND SHANGHAI BANKING CORPORATION, CORPORATION, LIMITED 7/F HSBC Centre, 3058 Fih Avenue, West Bonifacio Global City Taguig City 1634, Philippines Telephone Tele phone No.: (632) 581.7594 | (632) 581.7524 Fax No.: (632) 755.5548 Contact Person: Mr. Mike Sison -
[email protected] Ms. Rosh Oliva - stkmnl@hsbc stkmnl@hsbc .com.ph AEV welcomes inquiries from instuonal investors, analysts, and the nancial community. Please write or call:
Investor Relaons Aboiz Equity Ventures, Inc. Mr. Dave Michael Valeriano Mr. Aristo de Borja Tel. No. (63-2) 886-2423 Fax No. (63-2) 817-3560 Email: aev_investor@aboiz.com Website: www.aboiz.com
The Audit Committee Report to the Board of Directors
The Board Audit Commiee Report to the Board of Directors The Board Audit Commiee’s roles and responsibilies are embodied in the Board Audit Commiee Charter approved by the Board of Directors. Its primary funcon is to provide assistance to the Board in fullling its oversight responsibility to the shareholders relang relang to: (a) the quality and integrity of the Company’s accounng, auding, legal, ethical and regulatory compliance; (b) risk management; (c) nancial reporng pracces; and (d) corporate governance. Any proposed changes to the Audit Commiee Charter are referred to the Board for approval. Membership As of December 31, 2014, the Board Audit Commiee is composed of ve (5) members, three (3) of whom are independent directors. I, Carlos C. Ejercito, Independent Director and Chair of the Commiee is ably assisted by Romeo L. Bernardo (Independent Director), Alfonso A. Uy (Independent Director), Mikel A. Aboiz (Non-Execuve Director) and Antonio R. Moraza (Execuve Director). Meengs There were four (4) regular Commiee meengs held during the year—March 4, May 6, July 22 and October 28—one (1) special meeng on July 30, and two (2) j oint meengs—June 2 and Dec 11—with the Board Risk and Reputaon Management Commiee. Also present in these meengs is the Group Internal Audit Head, the Chief Reputaon and Risk Management Ocer, and by invitaon, the Aboiz Power Chief Financial Ocer and the AP Controller. Financial Reports On a high level basis, the Commiee reviewed, discussed, and endorsed for the approval of the Board the quarterly unaudited consolidated nancial statements statements and the annual audited nancial statements of Aboiz Power Corporaon and Subsidiaries. Included in the review are the Management Discussion and Analysis of Financial Condion and Results of Operaons aer these have been presented and discussed with management, accounng and the company’s independent external auditor, SyCip Gorres Velayo & Co. (SGV)—a member pracce of Ernst & Young (EY) in the Philippines. The acvies of the Audit Commiee were performed in the following context: • That management has the primary responsibility ty for the nancial statements and the nancial reporng process; and • That the company’s independent external external auditor is responsible for expressing an opinion on the conformity of the Company’s audited nancial statements with Philippine Financial Reporng Standards. Independent Auditors On July 22, 2014, the Board Audit Commiee endorsed the re-appointment of SyCip Gorres Velayo & Co. (SGV) as the independent external auditor for the company. The overall scope and audit plan of SGV were reviewed and approved during the October 28, 2014 regular Board Audit Commiee meeng. The terms of engagement which covers audit-related services provided by SGV and its related fees were also reviewed and found to be reasonable. The results of the SGV audits and its assessment of the overall quality of the nancial reporng process were discussed. SGV presented the eects of changes in relevant accounng standards and presentaon of nancial statements that impact on the reported results. These maers were covered during the rst Board Audit Commiee meeng held the following year on March 5, 2015. The delegaon to the Board of Directors of the appointment of the Company’s external auditor was largely upon the recommendaon of the Board Audit Commiee.
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Also, in the review of non-audit services provided by independent auditors, the C ommiee unanimously concurred/raed the opinion that there is no conict of interest and that the work that Ernst & Young (Indonesia) have been contracted to do for the Company is compable with the general standard of independence for auditors imposed by relevant regulaons.
All technical audits related to informaon systems and technology are handled by the group internal auditors unl such me that competencies to handle such audits can be transferred to the resident audit teams. Focus areas reviewed in 2014 include informaon technology general controls and soware applicaons reviews. The Commiee reviewed and approved the annual audit program for the year which also covers the adequacy of resources, qualicaons and competency of the sta and independence of the internal auditor. With reference to the IPPF Aribute Standard 1100 which states that “The Internal Audit Acvity must be independent, and internal auditors must be objecve in performing their work”, the Commiee conrms that the internal auditors conducted its responsibilies objecvely and in an unbiased manner. The Commiee further conrms that, to the best of its knowledge and belief, that the auditors have no personal or other impairments that prevent them from objecvely planning, conducng, reporng, or otherwise parcipang and reaching independent conclusions in their audit assignments in 2014. Internal audit is organizaonally posioned to be independent—administravely independent—administravely reporng to the President and Chief Execuve Ocer and funconally reporng to the Board Audit Commiee. Based on the informaon from the results of the audits conducted in 2014 for Aboiz Power Corporaon, its subsidiaries and alliances, with the contribuon provided by management and other key leaders on the issues raised to their aenon, Internal Audit believes that, overall there is reasonable assurance that the exisng system of internal controls allows for a generally adequate management of idened risks and eecvely supports the improvement of the management of the Company as a whole. Review of the Audit Charter The Commiee reviewed and assessed the current audit charter in its meeng held October 28, 2014 and found it adequate. No modicaon needed. Self-Assessment The Commiee conducted its annual self-assessment in accordance with the guidelines of SEC Memo Cir. No. 4, series of 2012. The assessment result showed that it fully complied with the requirements set forth in the Audit Charter and met the necessary and most important requirements set by global standards and best pracces. Risk Management The Commiee had two (2) joint meengs with the Board Risk and Reputaon Management Management Commiee in 2014 where the updated results of the Risk Management Plan validaon conducted conducted by GIA and the resident audit teams were presented. Considering the dynamic nature of risks, this closed-looped process from risk idencaon to risk treatment validaon should be ongoing and connual to ensure that risk treatment acvies that the business units commit commit to do are being done. The ulmate value of this process is to assist the business units in enhancing their capability to manage and monitor its top risks. It is also in these joint meengs that the members of the Audit Commiee are apprised of the top key strategic risks consequenal consequenal to the Company’s ability to execute its strategies and achieve its business objecves for the following year. High-level risk exposures are presented and discussed as these can aect shareholder value and ulmately the viability of the company. The signicant potenal impact of these strategic risks warrants a more focused aenon from the board and its directors. As in previous years, the Commiee connues to monitor acon plans and commitments developed by management to address audit issues and to ensure that proposed soluons are workable, strategic and sustainable. Finally, the Commiee has undertaken its acvies to ensure that it connues to deepen its focus on the integrity of nancial reporng, eecveness of internal controls, risk management, governance and compliance within the Aboiz Power group of companies. In behalf of the Commiee,
Internal Auditors The Group Internal Audit (GIA) takes the lead in seng the standards, iniaves and overall direcon of the group-wide resident internal audit teams deployed to the dierent business units. It remains to be the single point of contact for the Board Audit Commiee. The restructuring of the internal audit organizaon has proven to be a worthwhile endeavour as scope and coverage of audits have increased with resident audit teams being able to specialize in areas of business covered by their teams. Carlos C. Ejercito Chairman, Independent Director
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The Audit Committee Report to the Board of Directors
The Board Audit Commiee Report to the Board of Directors The Board Audit Commiee’s roles and responsibilies are embodied in the Board Audit Commiee Charter approved by the Board of Directors. Its primary funcon is to provide assistance to the Board in fullling its oversight responsibility to the shareholders relang relang to: (a) the quality and integrity of the Company’s accounng, auding, legal, ethical and regulatory compliance; (b) risk management; (c) nancial reporng pracces; and (d) corporate governance. Any proposed changes to the Audit Commiee Charter are referred to the Board for approval. Membership As of December 31, 2014, the Board Audit Commiee is composed of ve (5) members, three (3) of whom are independent directors. I, Carlos C. Ejercito, Independent Director and Chair of the Commiee is ably assisted by Romeo L. Bernardo (Independent Director), Alfonso A. Uy (Independent Director), Mikel A. Aboiz (Non-Execuve Director) and Antonio R. Moraza (Execuve Director). Meengs There were four (4) regular Commiee meengs held during the year—March 4, May 6, July 22 and October 28—one (1) special meeng on July 30, and two (2) j oint meengs—June 2 and Dec 11—with the Board Risk and Reputaon Management Commiee. Also present in these meengs is the Group Internal Audit Head, the Chief Reputaon and Risk Management Ocer, and by invitaon, the Aboiz Power Chief Financial Ocer and the AP Controller. Financial Reports On a high level basis, the Commiee reviewed, discussed, and endorsed for the approval of the Board the quarterly unaudited consolidated nancial statements statements and the annual audited nancial statements of Aboiz Power Corporaon and Subsidiaries. Included in the review are the Management Discussion and Analysis of Financial Condion and Results of Operaons aer these have been presented and discussed with management, accounng and the company’s independent external auditor, SyCip Gorres Velayo & Co. (SGV)—a member pracce of Ernst & Young (EY) in the Philippines. The acvies of the Audit Commiee were performed in the following context: • That management has the primary responsibility ty for the nancial statements and the nancial reporng process; and • That the company’s independent external external auditor is responsible for expressing an opinion on the conformity of the Company’s audited nancial statements with Philippine Financial Reporng Standards. Independent Auditors On July 22, 2014, the Board Audit Commiee endorsed the re-appointment of SyCip Gorres Velayo & Co. (SGV) as the independent external auditor for the company. The overall scope and audit plan of SGV were reviewed and approved during the October 28, 2014 regular Board Audit Commiee meeng. The terms of engagement which covers audit-related services provided by SGV and its related fees were also reviewed and found to be reasonable. The results of the SGV audits and its assessment of the overall quality of the nancial reporng process were discussed. SGV presented the eects of changes in relevant accounng standards and presentaon of nancial statements that impact on the reported results. These maers were covered during the rst Board Audit Commiee meeng held the following year on March 5, 2015. The delegaon to the Board of Directors of the appointment of the Company’s external auditor was largely upon the recommendaon of the Board Audit Commiee.
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Also, in the review of non-audit services provided by independent auditors, the C ommiee unanimously concurred/raed the opinion that there is no conict of interest and that the work that Ernst & Young (Indonesia) have been contracted to do for the Company is compable with the general standard of independence for auditors imposed by relevant regulaons.
All technical audits related to informaon systems and technology are handled by the group internal auditors unl such me that competencies to handle such audits can be transferred to the resident audit teams. Focus areas reviewed in 2014 include informaon technology general controls and soware applicaons reviews. The Commiee reviewed and approved the annual audit program for the year which also covers the adequacy of resources, qualicaons and competency of the sta and independence of the internal auditor. With reference to the IPPF Aribute Standard 1100 which states that “The Internal Audit Acvity must be independent, and internal auditors must be objecve in performing their work”, the Commiee conrms that the internal auditors conducted its responsibilies objecvely and in an unbiased manner. The Commiee further conrms that, to the best of its knowledge and belief, that the auditors have no personal or other impairments that prevent them from objecvely planning, conducng, reporng, or otherwise parcipang and reaching independent conclusions in their audit assignments in 2014. Internal audit is organizaonally posioned to be independent—administravely independent—administravely reporng to the President and Chief Execuve Ocer and funconally reporng to the Board Audit Commiee. Based on the informaon from the results of the audits conducted in 2014 for Aboiz Power Corporaon, its subsidiaries and alliances, with the contribuon provided by management and other key leaders on the issues raised to their aenon, Internal Audit believes that, overall there is reasonable assurance that the exisng system of internal controls allows for a generally adequate management of idened risks and eecvely supports the improvement of the management of the Company as a whole. Review of the Audit Charter The Commiee reviewed and assessed the current audit charter in its meeng held October 28, 2014 and found it adequate. No modicaon needed. Self-Assessment The Commiee conducted its annual self-assessment in accordance with the guidelines of SEC Memo Cir. No. 4, series of 2012. The assessment result showed that it fully complied with the requirements set forth in the Audit Charter and met the necessary and most important requirements set by global standards and best pracces. Risk Management The Commiee had two (2) joint meengs with the Board Risk and Reputaon Management Management Commiee in 2014 where the updated results of the Risk Management Plan validaon conducted conducted by GIA and the resident audit teams were presented. Considering the dynamic nature of risks, this closed-looped process from risk idencaon to risk treatment validaon should be ongoing and connual to ensure that risk treatment acvies that the business units commit commit to do are being done. The ulmate value of this process is to assist the business units in enhancing their capability to manage and monitor its top risks. It is also in these joint meengs that the members of the Audit Commiee are apprised of the top key strategic risks consequenal consequenal to the Company’s ability to execute its strategies and achieve its business objecves for the following year. High-level risk exposures are presented and discussed as these can aect shareholder value and ulmately the viability of the company. The signicant potenal impact of these strategic risks warrants a more focused aenon from the board and its directors. As in previous years, the Commiee connues to monitor acon plans and commitments developed by management to address audit issues and to ensure that proposed soluons are workable, strategic and sustainable. Finally, the Commiee has undertaken its acvies to ensure that it connues to deepen its focus on the integrity of nancial reporng, eecveness of internal controls, risk management, governance and compliance within the Aboiz Power group of companies. In behalf of the Commiee,
Internal Auditors The Group Internal Audit (GIA) takes the lead in seng the standards, iniaves and overall direcon of the group-wide resident internal audit teams deployed to the dierent business units. It remains to be the single point of contact for the Board Audit Commiee. The restructuring of the internal audit organizaon has proven to be a worthwhile endeavour as scope and coverage of audits have increased with resident audit teams being able to specialize in areas of business covered by their teams. Carlos C. Ejercito Chairman, Independent Director
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Statement of Management’s Responsibility for Financial Statements
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Statement of Management’s Responsibility for Financial Statements
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Independent Auditors’ Report .
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The Stockholders and the Board of Directors Aboitiz Power Corporation
We have audited the accompanying consolidated financial statements of Aboitiz Power Corporation and Subsidiaries, which comprise the consolidated balance sheets as at December 31, 2014 and 2013, and the consolidated statements of income, statements of comprehensive income, statements of changes in equity and statements of cash flows for each of the three years in the period ended December 31, 2014, and a summary of significant accounting policies and other explanatory information.
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Opinion
In our opinion, the consolidated consolidated financial statements present fairly, in all material respects, the financial position of Aboitiz Power Corporation and Subsidiaries as at December 31, 2014 and 2013, and their financial performance and their cash flows for each of the three years in the period ended December 31, 2014 in accordance with Philippine Financial Reporting Standards. Standards.
SYCIP GORRES VELAYO & CO.
Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Philippine Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Philippine Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
Leovina Mae V. Chu Partner CPA Certificate No. 99910 SEC Accreditation No. 1199-A (Group A), March 15, 2012, valid until March 31, 2015 Tax Identification No. 209-316-911 BIR Accreditation No. 08-001998-96-2015, 08-001998-96-2015, January 5, 2015, valid until January 4, 2018 PTR No. 4751341, January 5, 2015, Makati City March 10, 2015
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An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
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Independent Auditors’ Report .
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We have audited the accompanying consolidated financial statements of Aboitiz Power Corporation and Subsidiaries, which comprise the consolidated balance sheets as at December 31, 2014 and 2013, and the consolidated statements of income, statements of comprehensive income, statements of changes in equity and statements of cash flows for each of the three years in the period ended December 31, 2014, and a summary of significant accounting policies and other explanatory information.
In our opinion, the consolidated consolidated financial statements present fairly, in all material respects, the financial position of Aboitiz Power Corporation and Subsidiaries as at December 31, 2014 and 2013, and their financial performance and their cash flows for each of the three years in the period ended December 31, 2014 in accordance with Philippine Financial Reporting Standards. Standards.
SYCIP GORRES VELAYO & CO.
Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Philippine Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Philippine Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
Leovina Mae V. Chu Partner CPA Certificate No. 99910 SEC Accreditation No. 1199-A (Group A), March 15, 2012, valid until March 31, 2015 Tax Identification No. 209-316-911 BIR Accreditation No. 08-001998-96-2015, 08-001998-96-2015, January 5, 2015, valid until January 4, 2018 PTR No. 4751341, January 5, 2015, Makati City March 10, 2015
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An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. t r o p e R l a u n n A
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
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Independent Auditors’ Report on Supplementary Schedules . .
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Aboitiz Power Corporation and Subsidiaries Consolidated Balance Sheets
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(Amounts in Thousands)
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Consolidated Balance Sheets
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December 31 INDEPENDENT AUDITORS’ REPORT ON SUPPLEMENTARY SCHEDULES
2013
=40,231,875 P =40,231,875 12,332,513 53,500 2,168,832 1,939,369 56,726,089
=31,383,499 P =31,383,499 13,037,999 30,900 2,841,387 1,736,966 49,030,751
24,816,278 119,646,640 3,400,354 28,300 59,044
25,330,356 106,754,751 3,663,275 13,300 –
3,620 1,094,687 79,000 243,756 10,663,253 160,034,932
6,654 806,090 10,468 519,689 7,803,483 144,908,066
=216,761,021 = P216,761,021
=193,938,817 P =193,938,817
=103,000 P =103,000
=– P =–
1,388,991 1,971,739
832,877 780,905
40,000 12,778,001 – 604,158 P =16,885,889 =16,885,889
40,000 15,075,584 23 348,145 17,077,534
ASSETS
The Stockholders and the Board of Directors Aboitiz Power Corporation 32nd Street, Bonifacio Global City Taguig City, Metro Manila Philippines
Current Assets Cash and cash equivalents (Note 5) Trade and other receivables (Note 6) Derivative assets (Note 35) Inventories (Note 7) Other current assets (Note 8) Total Current Assets
We have audited in accordance with Philippine Standards on A uditing, the consolidated financial statements of Aboitiz Power Corporation and Subsidiaries i ncluded in this Form 17-A and have issued our report thereon dated March 10, 2015. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed in the Index to Financial Statements and Supplementary Schedules are the responsibility of the Company’s management. These schedules are presented for purposes of complying with the Securities Regulation Code Rule 68, as amended (2011) and are not part of the basic fi nancial statements. These schedules have been subjected to the auditing procedures applied in the audi t of the basic financial statements and, in our opinion, fai rly state in all material respects the fi nancial data required to be set forth therein in relation to the basic financial statements taken as a whole.
Noncurrent Assets Investments in and advances to associates (Note 10) Property, plant and equipment (Note 13) Intangible asset - service concession rights (Note 14) Investment properties Derivative assets - noncurrent portion (Note 35) Available-for-sale (AFS) investments - net of impairment of =5,254 P =5,254 Goodwill (Note 12) Net pension assets (Note 28) Deferred income tax assets (Note 30) Other noncurrent assets (Note 15) Total Noncurrent Assets
SYCIP GORRES VELAYO & CO.
2014 2014
TOTAL ASSETS LIABILITIES AND EQUITY
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Leovina Mae V. Chu Partner CPA Certificate No. 99910 SEC Accreditation No. 1199-A (Group A), March 15, 2012, valid until March 31, 2015 Tax Identification No. 209-316-911 BIR Accreditation No. 08-001998-96-2015, January 5, 2015, valid until January 4, 2018 PTR No. 4751341, January 5, 2015, Makati City
Current Liabilities Bank loans (Note 17) Current portions of: Long-term debts (Note 18) Finance lease obligation (Note 36) Long-term obligation on power distribution system (Note 14) Trade and other payables (Note 16) Derivative liabilities (Note 35) Income tax payable (Note 30) Total Current Liabilities
March 10, 2015 (Forward)
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Independent Auditors’ Report on Supplementary Schedules . .
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Aboitiz Power Corporation and Subsidiaries Consolidated Balance Sheets
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(Amounts in Thousands)
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Consolidated Balance Sheets
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December 31 INDEPENDENT AUDITORS’ REPORT ON SUPPLEMENTARY SCHEDULES
2014 2014
2013
=40,231,875 P =40,231,875 12,332,513 53,500 2,168,832 1,939,369 56,726,089
=31,383,499 P =31,383,499 13,037,999 30,900 2,841,387 1,736,966 49,030,751
24,816,278 119,646,640 3,400,354 28,300 59,044
25,330,356 106,754,751 3,663,275 13,300 –
3,620 1,094,687 79,000 243,756 10,663,253 160,034,932
6,654 806,090 10,468 519,689 7,803,483 144,908,066
=216,761,021 = P216,761,021
=193,938,817 P =193,938,817
=103,000 P =103,000
=– P =–
1,388,991 1,971,739
832,877 780,905
40,000 12,778,001 – 604,158 P =16,885,889 =16,885,889
40,000 15,075,584 23 348,145 17,077,534
ASSETS
The Stockholders and the Board of Directors Aboitiz Power Corporation 32nd Street, Bonifacio Global City Taguig City, Metro Manila Philippines
Current Assets Cash and cash equivalents (Note 5) Trade and other receivables (Note 6) Derivative assets (Note 35) Inventories (Note 7) Other current assets (Note 8) Total Current Assets
We have audited in accordance with Philippine Standards on A uditing, the consolidated financial statements of Aboitiz Power Corporation and Subsidiaries i ncluded in this Form 17-A and have issued our report thereon dated March 10, 2015. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed in the Index to Financial Statements and Supplementary Schedules are the responsibility of the Company’s management. These schedules are presented for purposes of complying with the Securities Regulation Code Rule 68, as amended (2011) and are not part of the basic fi nancial statements. These schedules have been subjected to the auditing procedures applied in the audi t of the basic financial statements and, in our opinion, fai rly state in all material respects the fi nancial data required to be set forth therein in relation to the basic financial statements taken as a whole.
Noncurrent Assets Investments in and advances to associates (Note 10) Property, plant and equipment (Note 13) Intangible asset - service concession rights (Note 14) Investment properties Derivative assets - noncurrent portion (Note 35) Available-for-sale (AFS) investments - net of impairment of =5,254 P =5,254 Goodwill (Note 12) Net pension assets (Note 28) Deferred income tax assets (Note 30) Other noncurrent assets (Note 15) Total Noncurrent Assets TOTAL ASSETS
SYCIP GORRES VELAYO & CO.
LIABILITIES AND EQUITY
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Current Liabilities Bank loans (Note 17) Current portions of: Long-term debts (Note 18) Finance lease obligation (Note 36) Long-term obligation on power distribution system (Note 14) Trade and other payables (Note 16) Derivative liabilities (Note 35) Income tax payable (Note 30)
Leovina Mae V. Chu Partner CPA Certificate No. 99910 SEC Accreditation No. 1199-A (Group A), March 15, 2012, valid until March 31, 2015 Tax Identification No. 209-316-911 BIR Accreditation No. 08-001998-96-2015, January 5, 2015, valid until January 4, 2018 PTR No. 4751341, January 5, 2015, Makati City
Total Current Liabilities March 10, 2015 (Forward)
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Consolidated Statements of Income Aboitiz Power Corporation and Subsidiaries Consolidated Statements of Income (Amounts in Thousands, Except Earnings Per Share Amounts)
December 31 2014 2014 Noncurrent Liabilities Noncurrent portions of: Long-term debts (Note 18) Finance lease obligation (Note 36) Long-term obligation on power distribution system (Note 14) Customers’ deposits (Note 19) Asset retirement obligation (Note 20) Net pension liabilities (Note 28) Deferred income tax liabilities (Note 30) Total Noncurrent Liabilities Total Liabilities Equity Attributable to Equity Holders of the Parent Capital stock (Note 21a) Additional paid-in capital (Note 21a) Share in net unrealized valuation gains on AFS investments of an associate (Note 10) Cumulative translation adjustments (Note 35) Share in cumulative translation adjustments of associates (Note 10) Actuarial losses on defined benefit plans (Note 28) Share in actuarial losses on defined benefit plans of associates (Note 10) Acquisition of non-controlling interests Excess of cost over net assets of investments (Note 9) Retained earnings (Note 21b) Appropriated Unappropriated (Notes 10 and 21c) Non-controlling Interests Total Equity (Note 21c) 21c) TOTAL LIABILITIES AND EQUITY See accompanying Notes to Consolidated Financial Statements. n o i t a r o p r o C r e w o P z i t i o b A
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Years Ended December 31
2013
=41,394,084 P =41,394,084 52,489,282
=22,455,062 P =22,455,062 54,421,858
216,015 5,686,490 2,353,250 405,854 1,249,717 103,794,692
223,865 5,138,155 2,008,669 452,807 910,110 85,610,526
120,680,581
102,688,060
7,358,604 12,588,894
7,358,604 12,588,894
OPERATING REVENUES Sale of power (Notes 22 and 32): Generation Distribution Retail electricity supply Technical, management and other fees (Note 33)
OPERATINGEXPENSES Cost of purchased power (Note 23) Cost of generated power (Note 24) General and administrative (Note 25) Depreciation and amortization (Notes 13, 14 and 15) Operations and maintenance (Note 26)
FINANCIAL INCOME (EXPENSES) Interest income (Notes 5 and 33) Interest expense and other financing costs (Notes 17, 18 and 34)
119,087 38,091
88,187 (24,511)
(375,489) (519,854)
(388,557) (694,746)
OTHER INCOME (EXPENSES) Share in net earnings of associates (Note 10) Other income (expenses) - net (Note 29)
(48,589) (259,147) (421,260)
(31,815) (259,147) –
INCOME BEFORE INCOME TAX
20,900,000 52,581,755 91,962,092 4,118,348 96,080,440
– 68,991,854 87,628,763 3,621,994 91,250,757
P =216,761,021 =216,761,021
=193,938,817 P =193,938,817
PROVISION FOR INCOME TAX (Note 30) NET INCOME ATTRIBUTABLE TO: Equity holders of the parent Non-controlling interests
EARNINGS PER COMMON SHARE (Note 31) Basic and diluted, for income for the year attributable to ordinary equity holders of the parent See accompanying Notes to Consolidated Financial Statements.
2014
2013
2012
=36,877,070 P =36,877,070 39,975,961 9,702,714 203,641 86,759,386
=39,436,267 P =39,436,267 28,067,236 4,372,597 179,067 72,055,167
=46,031,304 =P46,031,304 15,849,591 – 272,270 62,153,165
29,834,149 21,037,658 5,458,309 4,643,300 3,435,211 64,408,627
24,715,315 17,642,484 4,073,550 3,875,299 2,271,230
13,184,697 18,721,284 3,424,696 3,516,396 2,850,331
52,577,878
41,697,404
471,915
413,795
928,913
(5,994,097) (5,522,182)
(5,343,728)
(7,001,842)
(4,929,933)
(6,072,929)
4,009,488 591,925 4,601,413
6,474,370 (1,083,764) 5,390,606
9,939,763 1,983,606 11,923,369
21,429,990
19,937,962
26,306,201
3,424,089
526,625
1,390,567
=18,005,901 = P18,005,901
=19,411,337 P =19,411,337
=24,915,634 =P24,915,634
=16,705,184 P =16,705,184 1,300,717 =18,005,901 P =18,005,901
=18,576,845 P =18,576,845 834,492 =19,411,337 P =19,411,337
=24,425,708 =P24,425,708 489,926 =24,915,634 =P24,915,634
P =2. =2. 27
=2.52 P =2.52
=3.32 = P3.32
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Consolidated Statements of Income Aboitiz Power Corporation and Subsidiaries Consolidated Statements of Income (Amounts in Thousands, Except Earnings Per Share Amounts)
December 31 2014 2014 Noncurrent Liabilities Noncurrent portions of: Long-term debts (Note 18) Finance lease obligation (Note 36) Long-term obligation on power distribution system (Note 14) Customers’ deposits (Note 19) Asset retirement obligation (Note 20) Net pension liabilities (Note 28) Deferred income tax liabilities (Note 30) Total Noncurrent Liabilities Total Liabilities Equity Attributable to Equity Holders of the Parent Capital stock (Note 21a) Additional paid-in capital (Note 21a) Share in net unrealized valuation gains on AFS investments of an associate (Note 10) Cumulative translation adjustments (Note 35) Share in cumulative translation adjustments of associates (Note 10) Actuarial losses on defined benefit plans (Note 28) Share in actuarial losses on defined benefit plans of associates (Note 10) Acquisition of non-controlling interests Excess of cost over net assets of investments (Note 9) Retained earnings (Note 21b) Appropriated Unappropriated (Notes 10 and 21c) Non-controlling Interests Total Equity (Note 21c) 21c) TOTAL LIABILITIES AND EQUITY See accompanying Notes to Consolidated Financial Statements. n o i t a r o p r o C r e w o P z i t i o b A
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=41,394,084 P =41,394,084 52,489,282
=22,455,062 P =22,455,062 54,421,858
216,015 5,686,490 2,353,250 405,854 1,249,717 103,794,692
223,865 5,138,155 2,008,669 452,807 910,110 85,610,526
120,680,581
102,688,060
7,358,604 12,588,894
7,358,604 12,588,894
119,087 38,091
Years Ended December 31
2013
88,187 (24,511)
OPERATING REVENUES Sale of power (Notes 22 and 32): Generation Distribution Retail electricity supply Technical, management and other fees (Note 33)
OPERATINGEXPENSES Cost of purchased power (Note 23) Cost of generated power (Note 24) General and administrative (Note 25) Depreciation and amortization (Notes 13, 14 and 15) Operations and maintenance (Note 26)
FINANCIAL INCOME (EXPENSES) Interest income (Notes 5 and 33) Interest expense and other financing costs (Notes 17, 18 and 34)
(375,489) (519,854)
(388,557) (694,746)
OTHER INCOME (EXPENSES) Share in net earnings of associates (Note 10) Other income (expenses) - net (Note 29)
(48,589) (259,147) (421,260)
(31,815) (259,147) –
INCOME BEFORE INCOME TAX
20,900,000 52,581,755 91,962,092 4,118,348 96,080,440
– 68,991,854 87,628,763 3,621,994 91,250,757
P =216,761,021 =216,761,021
=193,938,817 P =193,938,817
PROVISION FOR INCOME TAX (Note 30) NET INCOME ATTRIBUTABLE TO: Equity holders of the parent Non-controlling interests
EARNINGS PER COMMON SHARE (Note 31) Basic and diluted, for income for the year attributable to ordinary equity holders of the parent See accompanying Notes to Consolidated Financial Statements.
2014
2013
2012
=36,877,070 P =36,877,070 39,975,961 9,702,714 203,641 86,759,386
=39,436,267 P =39,436,267 28,067,236 4,372,597 179,067 72,055,167
=46,031,304 =P46,031,304 15,849,591 – 272,270 62,153,165
29,834,149 21,037,658 5,458,309 4,643,300 3,435,211 64,408,627
24,715,315 17,642,484 4,073,550 3,875,299 2,271,230
13,184,697 18,721,284 3,424,696 3,516,396 2,850,331
52,577,878
41,697,404
471,915
413,795
928,913
(5,994,097) (5,522,182)
(5,343,728)
(7,001,842)
(4,929,933)
(6,072,929)
4,009,488 591,925 4,601,413
6,474,370 (1,083,764) 5,390,606
9,939,763 1,983,606 11,923,369
21,429,990
19,937,962
26,306,201
3,424,089
526,625
1,390,567
=18,005,901 = P18,005,901
=19,411,337 P =19,411,337
=24,915,634 =P24,915,634
=16,705,184 P =16,705,184 1,300,717 =18,005,901 P =18,005,901
=18,576,845 P =18,576,845 834,492 =19,411,337 P =19,411,337
=24,425,708 =P24,425,708 489,926 =24,915,634 =P24,915,634
P =2. =2. 27
=2.52 P =2.52
=3.32 = P3.32
t r o p e R l a u n n A
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135
Flows Consolidated Statements of Cash Flows Aboitiz Power Corporation and Subsidiaries Consolidated Statements of Cash Flows (Amounts in Thousands)
Years Ended December 31 CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Interest expense and other financing costs (Note 34) Depreciation and amortization (Notes 13 and 14) Provision for impairment losses on receivables (Note 25) Net unrealized foreign exchange losses (gains) Write-off of project costs and other assets Amortization of software (Note 15) Impairment loss on AFS and investment in an associate (Note 10) Unrealized fair valuation losses (gains) on derivatives Impairment loss on goodwill (Note 12) Gain on remeasurement in step acquisition (Note 9) Gain on redemption of shares of associates (Note 29) Loss (gain) on sale of property, plant and equipment Fair valuation gain on investment property Interest income (Notes 5 and 33) Share in net earnings of associates (Note 10) Operating income before working capital changes Decrease (increase) in: Trade and other receivables Inventories Other current assets Increase (decrease) in: Trade and other payables Customers’ deposits Net cash generated from operations Income and final taxes paid Service fees paid (Note 14) Net cash flows from operating activities activities
n o i t a r o p r o C r e w o P z i t i o b A
140
CASH FLOWS FROM INVESTING ACTIVITIES Cash dividends received (Note 10) Interest received Proceeds from redemption of shares of associates (Note 10) Net collection of advances to associates (Note 10) Proceeds from sale of property, plant and equipment Additions to: Property, plant and equipment (Note 13) Intangible assets - service concession rights (Note 14) (Forward)
Years Ended December 31
2014
2013
2012
P =21, =21, 429, 990
P =19,9 =19,9 37,96 2
P =26,3 =26,3 06,20 1
5,994,097
5,343,728
7,001,842
4,630,515
3,861,129
3,509,974
563,278 188,018 26,000 12,787
14,055 2,078,138 85,051 14,170
819,024 (1,658,983) – 6,422
2,834
568,125
897 –
(395) 368,904
–
(964,600)
(4,904)
(4,792)
– (1,826) – – (27,087)
(1,323) – (413,795) (6,474,370) 24,411,987
3,616 – (928,913) (9,939,763) 25,090,507
(2,181,712) (311,931) (680,254)
(1,379,002) 203,211 68,361
(2,834,127) 548,335
3,700,017 898,974
1,769,105 240,166
25,960,259 (2,482,280) (40,000) 23,437,979
25,837,081 (1,383,938) (40,000) 24,413,143
25,992,348 (1,084,609) (40,000) 24,867,739
4,618,730 390,638
4,241,994 364,490
13,977,589 953,637
31,599 101,835 17,406
323,717 25,000 10,222
573,236 151,947 412
(13,195) (15,000) (471,915) (4,009,488) 28,333,914 (362,479) 477,019 (202,403)
(15,003,744)
(15,618,273)
(9,856,235)
(36,286)
(41,694)
(48,920)
Increase in other noncurrent assets Additional investments in associates (Note 10) Additional AFS investments Acquisitions through business combinations, net of cash acquired (Note 9) Proceeds from sale of AFS Net cash flows from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from availment of long-term debt - net of transaction costs (Note 18) Cash dividends paid (Note 21b) Payments of: Long-term debt (Note 18) Finance lease obligation Net availments (payments) of bank loans (Note 17) Changes in non-controlling interests Interest paid Payments to a preferred shareholder of a subsidiary Net cash flows used in financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
2014 (P =1,915,107) =1,915,107) (2,500) –
2013 (P =968,892) =968,892) (56,250) (200)
(1,182,366) 200 (12,979,595)
(11,502,024)
4,516,210
20,634,755 (12,215,283)
20,797,150 (13,834,176)
1,540,280 (9,713,358)
(854,220) (6,970,625) 103,000 (949,131) (1,367,428) – (1,618,932)
(8,965,920) (6,722,939) (2,332,000) (612,229) (513,562) (62,140) (12,245,816)
(9,156,183) (2,476,221) (337,600) (625,748) (1,255,161) (31,070) (22,055,061)
217,862 –
8,839,452
665,303
2012 (P =1,233,808) =1,233,808) (1,648) – – –
7,328,888
8,924
39,703
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
(41,956)
31,383,499
30,678,493
23,391,561
CASH AND CASH EQUIVALENTS AT END OF YEAR (Note YEAR (Note 5)
P =40, =40, 231, 875
P =31,3 =31,3 83,49 9
P =30,6 =30,6 78,49 3
See accompanying Notes to Consolidated Financial Statements.
t r o p e R l a u n n A
4 1 0 2
141
Flows Consolidated Statements of Cash Flows Aboitiz Power Corporation and Subsidiaries Consolidated Statements of Cash Flows (Amounts in Thousands)
Years Ended December 31 CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Interest expense and other financing costs (Note 34) Depreciation and amortization (Notes 13 and 14) Provision for impairment losses on receivables (Note 25) Net unrealized foreign exchange losses (gains) Write-off of project costs and other assets Amortization of software (Note 15) Impairment loss on AFS and investment in an associate (Note 10) Unrealized fair valuation losses (gains) on derivatives Impairment loss on goodwill (Note 12) Gain on remeasurement in step acquisition (Note 9) Gain on redemption of shares of associates (Note 29) Loss (gain) on sale of property, plant and equipment Fair valuation gain on investment property Interest income (Notes 5 and 33) Share in net earnings of associates (Note 10) Operating income before working capital changes Decrease (increase) in: Trade and other receivables Inventories Other current assets Increase (decrease) in: Trade and other payables Customers’ deposits Net cash generated from operations Income and final taxes paid Service fees paid (Note 14) Net cash flows from operating activities activities
n o i t a r o p r o C r e w o P z i t i o b A
CASH FLOWS FROM INVESTING ACTIVITIES Cash dividends received (Note 10) Interest received Proceeds from redemption of shares of associates (Note 10) Net collection of advances to associates (Note 10) Proceeds from sale of property, plant and equipment Additions to: Property, plant and equipment (Note 13) Intangible assets - service concession rights (Note 14)
Years Ended December 31
2014
2013
2012
P =21, =21, 429, 990
P =19,9 =19,9 37,96 2
P =26,3 =26,3 06,20 1
5,994,097
5,343,728
7,001,842
4,630,515
3,861,129
3,509,974
563,278 188,018 26,000 12,787
14,055 2,078,138 85,051 14,170
819,024 (1,658,983) – 6,422
2,834
568,125
897 –
(395) 368,904
–
(964,600)
(4,904)
(4,792)
– (1,826) – – (27,087)
(1,323) – (413,795) (6,474,370) 24,411,987
3,616 – (928,913) (9,939,763) 25,090,507
(2,181,712) (311,931) (680,254)
(1,379,002) 203,211 68,361
(2,834,127) 548,335
3,700,017 898,974
1,769,105 240,166
25,960,259 (2,482,280) (40,000) 23,437,979
25,837,081 (1,383,938) (40,000) 24,413,143
25,992,348 (1,084,609) (40,000) 24,867,739
4,618,730 390,638
4,241,994 364,490
13,977,589 953,637
31,599 101,835 17,406
323,717 25,000 10,222
573,236 151,947 412
(13,195) (15,000) (471,915) (4,009,488) 28,333,914 (362,479) 477,019 (202,403)
(15,003,744)
(15,618,273)
(9,856,235)
(36,286)
(41,694)
(48,920)
Increase in other noncurrent assets Additional investments in associates (Note 10) Additional AFS investments Acquisitions through business combinations, net of cash acquired (Note 9) Proceeds from sale of AFS Net cash flows from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from availment of long-term debt - net of transaction costs (Note 18) Cash dividends paid (Note 21b) Payments of: Long-term debt (Note 18) Finance lease obligation Net availments (payments) of bank loans (Note 17) Changes in non-controlling interests Interest paid Payments to a preferred shareholder of a subsidiary Net cash flows used in financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
2014 (P =1,915,107) =1,915,107) (2,500) –
2013 (P =968,892) =968,892) (56,250) (200)
2012 (P =1,233,808) =1,233,808) (1,648) –
217,862 –
– –
(1,182,366) 200 (12,979,595)
(11,502,024)
4,516,210
20,634,755 (12,215,283)
20,797,150 (13,834,176)
1,540,280 (9,713,358)
(854,220) (6,970,625) 103,000 (949,131) (1,367,428) – (1,618,932)
(8,965,920) (6,722,939) (2,332,000) (612,229) (513,562) (62,140) (12,245,816)
(9,156,183) (2,476,221) (337,600) (625,748) (1,255,161) (31,070) (22,055,061)
8,839,452
665,303
7,328,888
8,924
39,703
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
(41,956)
31,383,499
30,678,493
23,391,561
CASH AND CASH EQUIVALENTS AT END OF YEAR (Note YEAR (Note 5)
P =40, =40, 231, 875
P =31,3 =31,3 83,49 9
P =30,6 =30,6 78,49 3
See accompanying Notes to Consolidated Financial Statements.
t r o p e R l a u n n A
(Forward)
4 1 0 2
140
141
Investor Information Head Oce: NAC Tower, Tower, 32nd Street, Bonifacio Global City, 1634 Taguig, Metro Manila , Philippines Tel (632) 886.2800 | Fax (632) 886.2407 Cebu Oce: Aboiz Corporate Center, Gov. Gov. Manuel A. Cuenco Avenue Kasambagan, 6000 Cebu City, Philippines Tel (6332) 411.1800 | Fax (6332) 231.4037 Common Stock The Company’s common stock is listed and traded on the Philippine Stock Exchange. Stockholders’ Meeng Stockholders’ The Company’s regular stockholders’ meeng is held on the third Monday of May of every year. Stockholder Services and Assistance The Hongkong and Shanghai Banking Corporaon, Ltd. (HSBC) serves as the Company’s stock transfer agent registrar. For maers concerning dividend payments, account status, lost or damaged stock cercates, change of address, please write or call: THE HONGKONG AND SHANGHAI BANKING CORPORATION, CORPORATION, LIMITED 7/F HSBC Centre, 3058 Fih Avenue, West Bonifacio Global City Taguig City 1634, Philippines Telephone Tele phone No.: (632) 581.7594 | (632) 581.7524 Fax No.: (632) 755.5548 Contact Person: Mr. Mike Sison -
[email protected] Ms. Rosh Oliva -
[email protected] AboizPower welcomes inquiries from instuonal investors, analysts, and the nancial community.
Credits Design and Layout: AEV and Publicis JimenezBasic Photography: Sarah Black and Pia Puno (Portraits) Painngs: Jason Sto. Domingo
Please write or call: n o i t a r o p r o C r e w o P z i t i o b A
142
Investor Relaons Aboiz Power Corporaon Mr. Dave Michael Valeriano Mr. Aristo de Borja Tel.. No. (63-2) 886-2423 Tel Fax No. (63-2) 817-3560 Email: ap_investor@aboiz.com Website: www.aboizpower.com
cered
The Aboiz Equity Ventures, Inc. 2014 Annual Report cover is printed on 9Lives Oset, a 100% recycled, high-bulk paper that is FSC-cered and carbon neutral. The inside pages are printed on crisp 9Lives Silk “born again” (recycled) paper that is also FSC-cered.
Investor Information Head Oce: NAC Tower, Tower, 32nd Street, Bonifacio Global City, 1634 Taguig, Metro Manila , Philippines Tel (632) 886.2800 | Fax (632) 886.2407 Cebu Oce: Aboiz Corporate Center, Gov. Gov. Manuel A. Cuenco Avenue Kasambagan, 6000 Cebu City, Philippines Tel (6332) 411.1800 | Fax (6332) 231.4037 Common Stock The Company’s common stock is listed and traded on the Philippine Stock Exchange. Stockholders’ Meeng Stockholders’ The Company’s regular stockholders’ meeng is held on the third Monday of May of every year. Stockholder Services and Assistance The Hongkong and Shanghai Banking Corporaon, Ltd. (HSBC) serves as the Company’s stock transfer agent registrar. For maers concerning dividend payments, account status, lost or damaged stock cercates, change of address, please write or call: THE HONGKONG AND SHANGHAI BANKING CORPORATION, CORPORATION, LIMITED 7/F HSBC Centre, 3058 Fih Avenue, West Bonifacio Global City Taguig City 1634, Philippines Telephone Tele phone No.: (632) 581.7594 | (632) 581.7524 Fax No.: (632) 755.5548 Contact Person: Mr. Mike Sison -
[email protected] Ms. Rosh Oliva -
[email protected] AboizPower welcomes inquiries from instuonal investors, analysts, and the nancial community.
Credits Design and Layout: AEV and Publicis JimenezBasic Photography: Sarah Black and Pia Puno (Portraits) Painngs: Jason Sto. Domingo
Please write or call: n o i t a r o p r o C r e w o P z i t i o b A
142
Investor Relaons Aboiz Power Corporaon Mr. Dave Michael Valeriano Mr. Aristo de Borja Tel.. No. (63-2) 886-2423 Tel Fax No. (63-2) 817-3560 Email: ap_investor@aboiz.com Website: www.aboizpower.com
cered
The Aboiz Equity Ventures, Inc. 2014 Annual Report cover is printed on 9Lives Oset, a 100% recycled, high-bulk paper that is FSC-cered and carbon neutral. The inside pages are printed on crisp 9Lives Silk “born again” (recycled) paper that is also FSC-cered.
www.aboiz.com