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Aboitiz Equity Ventures

Shareholders’ Report

YTD March 2015

2

NET INCOME (In Million Pesos)

3,212 3,342

731 382

339 416

121 80

466

(134)1Q2014 1Q2015

4,086EPS = P0.74

16%

4,868EPS = P0.88

Power Banking Food Parent & OthersReal Estate

• First quarter consolidated net incomedeclined by 16% to P4.1 bn. This was mainlydue to the weaker results coming from theBanking and Property Units. The unfavorablevariance was also due to the higher base in2014 of the Parent as it booked a one-timegain of close to P634 million from the sale ofa couple of its subsidiaries.

• The Power unit accounted for the bulk ofearnings at 79% of the consolidated netincome, followed by the Food, Banking andProperty units with contributions of 10%,9% and 2% of total, respectively

3

CORE NET INCOME (In Million Pesos)

Non-Recurring Items1Q2014 1Q2015

Parent 633 (0.3)

Power (162) 9

Total Gains/(Losses) 471 9

3,375 3,333

731 382

339

416

121 80

(167) (134)1Q2014 1Q2015

4,077EPS = P0.74

7%

4,398EPS = P0.80


• 1Q2015 one-offs came from AP’s FX gains andParent’s FX loss due to the revaluation ofconsolidated dollar-denominated liabilities.

• 1Q2014 one-off gains came from the sale of someassets as part of the Company’s businessrationalization strategy. On the other hand, the FXloss was due to the revaluation of consolidateddollar-denominated loans and placements.

4

EBITDA (In Million Pesos)

6,618 6,559

899 516

590 721

154 126

(1) (14)1Q2014 1Q2015

7,9084%

8,260


• Beneficial EBITDA decreased by 4% due tothe lower contribution of the Banking unitas a result of lower trading gains and netinterest income. On the other hand, this waspartially offset by the higher EBITDAcontribution of the Food unit’s Philippineand Vietnam Feeds divisions.

• Beneficial EBITDA is the summation of theproportionate share of AEV in the EBITDA ofits subsidiaries and associate companies

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RESULTS OF OPERATIONS – POWER GROUP

475 625

2,738 2,747

1Q2014 1Q2015

3,3424%

3,212

DistributionGeneration AP Parent & Others

• AboitizPower’s net income contributionstood 4% higher for the first three monthsof 2015.

• The Generation business’ contribution wasflat.

• The growth was mainly driven by thedistribution business which saw a YoYincrease of 31% due to the strongperformance of Davao Light and the freshcontribution of Lima Enerzone.

NET INCOME (in million pesos)

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YTD Prices

Peak Off Peak All Hours

2013 8,882 3,397 5,843

2014 6,271 2,876 4,532

Apr 2014 7,331 3,093 5,040

Apr 2015 5,864 2,761 4,303

WESM AVERAGE PRICES, Luzon Grid (P/MWh)

RESULTS OF OPERATIONS – POWER GROUP

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516 540

894 943

232 176 156 144

1Q2014 1Q2015

Energy contracts Capacity contracts

Spot market Ancillary

1,8041,7980.3%

• Capacity sales stood flat to 1,804 MW from1,798 MW last year as the decline in Tiwi-Makban’s sales offset the additional capacitythat the Company sold from Therma Mobile.

CAPACITY SALES BREAKDOWN (MW)

RESULTS OF OPERATIONS – POWER GENERATION

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SNAP MAGAT & SNAP BENGUET ANCILLARY SERVICES (at 100%)

Ancillary Revenues(in million pesos)

Accepted & Billed Capacity(in GW/h)

SNAP Magat

SNAP Benguet

268 270

217 216

1Q2014 1Q2015

560 604

741 474

1Q2014 1Q2015

1,078 485 48617%1,301

• Ancillary sales volume for the first quarter was flat year-on-year. Despitethe flat sales volume, ancillary revenues for the period declined by 17%.This was primarily due to the implementation of Binga’s new ancillarycontract resulting to lower average ancillary rates.

RESULTS OF OPERATIONS – POWER GENERATION

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OTHER DEVELOPMENTS - GENERATION

GREENFIELD AND BROWNFIELD DEVELOPMENTS

• 300 MW Coal-fired Power Plant in Davao

– A project of wholly owned subsidiary,Therma South, Inc. (TSI), which involvesthe construction and operation of2x150MW coal-fired power plant inDavao, the biggest load center in theisland of Mindanao.

– The project broke ground in May 2012.The Mindanao-wide blackout thatoccurred last April 2015, disrupted thecommissioning schedule of Unit 2 of TSI.The property damage will delay thecommercial operations of Unit 2 byapproximately 10 months or untilFebruary 2016. On the other hand, Unit1 will remain on schedule and shouldstart commercial operation by the endof June 2015.

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• 300 MW(net) Coal-fired Project in Toledo City, Cebu

– Therma Visayas, Inc. (“TSI”), a wholly owned subsidiary of AboitizPower, is developing a 2x150 MW (net) coal-fired power project in Toledo City.

– The project site was acquired in December 2011.

– The Environmental clearance was issued in May 2013.

– Turnover of the first unit is targeted for year-end 2017, with the second following three months thereafter.

400 MW Coal-fired Power Plant in Pagbilao, Quezon

In September 2011, AP signed a Memorandum of Understanding with Marubeni Corporation to formalize their intention to jointly develop, construct and operate a coal-fired power plant with a capacity of 400 MW (net).

The unit will be located within the premises of the existing 728 MW Pagbilao coal-fired plant.

The plant construction commenced last September 2014 and the target commercial operation is planned for year-end 2017.

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14 MW Sabangan Hydro Power Plant Project

A project of Hedcor Sabangan, Inc., that involves the construction of a run-of-river hydropower plant facility to be located in Mt. Province (Northern Luzon)

The project was granted all the permits and licenses in the first quarter of 2013.

The construction commenced in May 2013 and will take approximately 24 months to finish.

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• 68 MW Manolo Fortich Hydro Power Plant Project

– A project of Hedcor Bukidnon, Inc., this involves the construction of a run-of-river hydropower plant facility to be located in Mt. Province (Northern Luzon)

– Currently completing the permits and licenses after which a 24-month construction period will follow.

600 MW Coal-fired Power Plant in Subic Project by Redondo Peninsula Energy,

Inc. (RP Energy), a JV among MeralcoPowerGen Corporation (MPGC), Aboitiz subsidiary Therma Power, Inc. (TPI) and Taiwan Cogeneration International Corporation (TCIC).

Commercial operation is estimated to begin by 2018.

AboitizPower, through TPI will have an equity interest of 25% in RP Energy.

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Other Power Plant Developments

AboitizPower recently partnered with SunEdison to develop photovoltaic solar projectopportunities in the Philippines. This is consistent with the Company’s focus on environmentalsustainability and diversified power generation technologies. The agreement formalizesSunEdison’s intention to jointly explore, develop, construct and operate up to 300 MW ofutility-scale solar photovoltaic power generation projects in the Philippines over the next threeyears.

SNAP's Greenfield Development Program aims to grow its renewable portfolio by looking atpotential small and large hydro projects in the Philippines, primarily within its current hostcommunities in northern Luzon.

SNAP-Greenfield secured renewable energy service contracts (RESCs) from the Department ofEnergy (DOE) on December 2, 2013 for its proposed 6-MW Maris South Canal and 1.75-MWMaris North Canal mini-hydropower projects located downstream of the National IrrigationAdministration (NIA)-owned and -operated Maris dam and reservoir. The Maris dam andreservoir, which form the tailwater of Magat hydroelectric power plant, is situated at theboundary of Alfonso Lista, Ifugao and Ramon, Isabela. SNAP-Greenfield is currently waiting forDOE approval of the assignment of the RESCs to SNAP-Magat. NIA and SNAP-Magat havesigned a Memorandum of Understanding (MOU) for SNAP to develop both projects.

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SNAP-Ifugao has also secured on July 24, 2014 RESCs for its proposed 350-MW hydropowercomplex project in Ifugao, which is composed of three facilities: the 100-MW Alimithydropower plant, the 240-MW Alimit pumped storage facility, and the 10-MW Oliliconhydropower plant. Both Maris and Alimit projects are currently in the feasibility study stage.

SNAP-Magat and the NIA held the ground-breaking ceremony for the optimization of the MarisReservoir on November 4, 2014. Maris Optimization is a project of NIA with SNAP-Magat as itsproject partner. It aims to raise the Maris Reservoir by adding a set of stoplogs about threemeters high. The project is expected to add some eight million cubic meters of storage, andwill also entail refurbishment and improvements to the Maris dam structure for betterirrigation water delivery and safety. Work is scheduled to begin in January 2015 and targetedfor completion by first quarter of 2016.

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Hedcor continually explores hydropower potentials located in Luzon and Mindanao. Based oncurrent findings, Hedcor sees the potential of building plants with capacities ranging from 20MW to 80 MW. When the projects pass the evaluation stage and once permits are secured, thetwo-year construction period for the hydropower plant facilities will commence.

Additionally, Hedcor Inc.’s Ferdinand L. Singit (FLS) Power Plant is nearing the completion of itsexpansion from 4.9 MW to 6.1 MW with the installation of new turbines and generators.

AboitizPower is also exploring new geothermal resources. Currently, pre-development worksare ongoing in several areas namely, Negron-Cuadrado located in Central Luzon and Mt. Apolocated in Mindanao. Both the Negron-Cuadrado and Mt. Apo geothermal projects have beenawarded geothermal renewable energy service contracts (GRESC) by the Department ofEnergy.

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Participation in the Government’s Privatization Program for its Power Assets

AboitizPower continues to closely evaluate the investment viability of the remaining power generation assets that PSALM intends to auction off.

AboitizPower is also keen on participating in PSALM’s public auction for the IPP Administrator contracts, which involves the transfer of the management and control of total energy output of power plants under contract with NPC to the IPP administrators.

In November 2013, Aboitiz Energy Solutions, Inc. (AESI) participated in the bidding for the IPPA of the strips of the Unified Leyte Geothermal Power Plant (ULGPP). AESI won 40 strips of energy corresponding to 40 MW capacity of ULGPP. The Notice of Award was issued to AESI on January 29, 2014. This IPPA contract will allow AESI to sell 40 MW of geothermal power from ULGPP, beginning January 1, 2015.

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2,790 3,142 3,322 3,606 3,727 3,934 4,076 4,480

1,000 1,111

2007 2008 2009 2010 2011 2012 2013 2014 1Q2014 1Q2015

11%

253

747

1,000

270

841

1,111

Residential Commercial & Industrial Total Power Sales

1Q2014 1Q2015

BENEFICIAL GWH SALES GROWTH(BY CUSTOMER TYPE)

11%

7%

13%

The growth in sales was primarilydriven by higher electricity salesacross all customer segments, withresidential, commercial and industrialsales registering YoY growth of 7%, 5%and 14% respectively.

RESULTS OF OPERATIONS – POWER DISTRIBUTION

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RESULTS OF OPERATIONS – POWER DISTRIBUTION

• All distribution units are within the regulator-imposed cap on system loss levels of 8.5%.

0%

1%1%

4%

7%7%

8% 8%

2%

1% 1%

3%

7%

6%

8% 8%

SYSTEMS LOSSGROSS MARGIN / KWH SALE

SFELAPCOSEZ Davao Light VECO CotabatoLight

MEZ BEZ

1.25

1.44

1.60

1.77 1.71

1.51

2010 2011 2012 2013 2014 1Q2015

1Q2014

1Q2015

Gov’t Cap – 8.50%

LEZ

• The group’s year-to-date gross margin on a per kWh basis declined to P1.51 from 1.53 a year ago.

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OTHER DEVELOPMENTS - DISTRIBUTION

Performance-Based Regulation

Cotabato LightThe reset process has been

delayed due to the issuance of an Issues Paper on the

Implementation of PBR for Distribution Utilities under the

RDWR by the ERC in 2013.

VECO and Davao LightVisayan Electric and Davao Light’s Second Regulatory Period ended on June 30, 2014. They are still implementing the distribution, supply and metering charges

approved for the last year of the 2nd Regulatory Period. .

SFELAPCO and Subic EnerZoneSan Fernando Electric and Subic

Enerzone’s fourth regulatory year covering October 1, 2014 to

September 30, 2015, ERC released the Decisions for the rate

translation application on April 2015. The new rates shall be

implemented in the aforementioned period or until such time that a reset process

allows the DUs to revise its distribution, supply and metering

charges.

20

RESULTS OF OPERATIONS – BANKING

731

382

1Q2014 1Q2015

UnionBank

48%

In P million

AEV's Ownership

UnionBank

As of 1Q2014 47.4%

As of 1Q2015 47.4%

UnionBank’s inncome contribution dropped 48% YoY. The decline was mainly due to lower trading gains and foreign exchange losses.

21


In P million

2,561 2,528

1Q2014 1Q2015

UnionBank

In P million

UnionBank’s net interest income was flat onhigher average costs of interest bearingliabilities, which more than offset the marginalgrowth in interest income.

22


142,508 149,203

1Q2014 1Q2015

UnionBank

5%

In P million

Total loan book expanded by 5% YoY. The increase was anchored on robust growth in consumer lending activities.

23


Total deposit liabilities contracted by 20% YoY mainly due to the decline in time deposits.

329

265

1Q2014 1Q2015

UnionBank

In P billion

20%

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RESULTS OF OPERATIONS – FOOD


186 178

86 146

32

67

60

1Q2014 1Q2015

416

339

23%

Feeds PhilippinesFlour FarmsFeeds Vietnam

Pilmico posted a 23% YoY increase inincome contribution to P416.7 million.The growth was propelled by theremarkable performance of FeedsPhilippines whose NIAT went up by 70%as well as the fresh contribution fromFeeds Vietnam.

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OTHER DEVELOPMENTS – FOOD

Feeds

Feedmill Expansion Iligan: September 2014 – December 2015

Feedmill Expansion Trlac: January 2015 – April 2016

Inter-Island Pier 2: September 2014 – June 2015 (Completed)

Farms

Farm Expansion 3: Increase in sow level from 8,360 to 13,640 heads completed by Q2 2017

Breeder Farm 2: November 2014 – July 2016

Offsite Nursery Farm 2: February 2015 – August 2016

Grow-fin farm 7-11: January 2016 – August 2017

Farms Expansion 4: Increase sow level to 25,340 by 2020

Layer Farm: August 2014 – October 2015

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RESULTS OF OPERATIONS – PROPERTY

121

80

1Q2014 1Q2015

AboitizLand

34%


AboitizLand’s income contributiondeclined 34% YoY as operatingexpenses went up by 44% onaccount of higher manpowerrelated cost due to the ongoingorganizational expansion ofAboitizLand.

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OTHER DEVELOPMENTS – PROPERTY

AboitizLand has budgeted P4.9 bn CAPEX to support its growth initiatives. 65% of which will be allocated for land acquisition and 35% for project construction.

As of 1Q2015, total CAPEX spent amounted to P0.5 bn. This was used for land acquisition and development of existing projects.

• Moreover, Cebu District Property Enterprise, Inc., the 50-50 JV bet. AboitizLandand Ayala Land Inc, is launching the Estate & first residential condo within the year. The JV is also looking at ground breaking for commercial development construction, which will be completed in 2 years.

• Following the success of The Outlets at Pueblo Verde, an expansion to almost double its capacity is on its way.

• Lima’s 150-hectare expansion is underway to augment the AboitizLand’s revenue and profit levels.

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FINANCIAL CONDITION

Consolidated Figures, In P Million

2014 End Mar 2015

280,997 290,227

Total Assets

Total Liabilities

Cash & Cash Equivalents

Total Equity

2014 End Mar 2015

50,482 55,819

2014 End Mar 2015

146,062 155,886

2014 End Mar 2015

134,935 134,341

0.27

0.52

1.58 1.58

1.44 1.27

1.11

0.56 0.53

4.6% 4.2% 3.7% 3.3% 3.4% 3.0% 1.9%

2009 2010 2011 2012 2013 2014 2015

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DIVIDENDS

Internal dividend policy is to payout 1/3 of previous year’s net earnings

On March 10, 2015, AEV declared a dividend of P1.11 per share to all stockholders of record as of March 24, 2015, payable on April 20, 2015. which translated to 1/3 of 2014 net earnings

Paid out over P6.2 billion in dividends on April 20, 2015

Note: Dividend yields are based on closing prices as of date of dividend declaration.

Dividend per share

Dividend yield

Special Cash Dividend

2.001.80

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SHARE PRICE PERFORMANCE

YTD March 2015

PSEi: +10%AEV: +10%

Is there a better way?

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