Company Profile

Aboitiz Power Corporation is an electric utility company and was incorporated in 1998 operating in the Philippines. The company is a publicly listed holding company for the Aboitiz Group’s Investments in power generation, distribution and retail electricity services.

The company owns and manages different generation plants, distribution utilities and retail electricity suppliers in the Philippines.

Aboitiz Power Corporation (AP) Extended Graph Analysis

1. AP CASH FLOWS

	2014	2015	2016	2017	2018	2019
Net cash flow provided by operating activites	23,437,979,000	25,199,597,000	29,887,980,000	30,235,931,000	37,287,900,000	44,514,829,000
Net cash used for investing activities	-12,979,595,000	-8,902,646,000	-81,380,348,000	-9,452,925,000	-7,243,119,000	-31,830,364,000
Net cash provided by (used for) financing activities	-1,618,932,000	-5,448,755,000	-47,483,228,000	-32,122,699,000	-19,155,753,000	-10,939,485,000
Capital expenditure	-15,040,030,000	-15,721,460,000	-28,249,166,000	-16,154,209,000	-8,660,124,000	-7,855,366,000
Free cash flow	8,397,949,000	9,478,137,000	1,638,814,000	14,081,722,000	28,627,776,000	36,659,463,000

Facts

• The net cash flow provided by operating activities were Php 44.515 billion in the trailing twelve months.
• Net cash used for investing activities were -Php 31.830 billion in the trailing twelve months.
• Net cash provided by (used for) financing activities were -Php 10.939 billion in the trailing twelve months.
• Capital expenditure was -Php 7.855 billion in the trailing twelve months.
• Free cash flow was Php 36.659 billion in the trailing twelve months.

Explanation

• Cash provided by operating activities increases year-over-year and has a growth of 90 percent in five years.
• Net cash used for investing activities were investments in properties, plant and equipment; and purchases of investments.
• Cash provided by financing activities were dividends payments.
• Capital expenditure was purchases of property, plant and equipment.
• Free cash flow was erratic in movement in the last five years.

Interpretation

The company was able to generate cash from operating activities in the last five years. Investment gains, changes in working capital, other working capital and other non-cash items were significant in the operating activities.

 

2. AP BALANCE SHEET

	2014	2015	2016	2017	2018	2019
Total cash	40,231,875,000	51,098,269,000	47,094,741,000	35,699,631,000	46,343,041,000	31,478,303,000
Total current asset	56,726,089,000	70,409,021,000	73,649,187,000	67,961,596,000	88,708,607,000	71,129,407,000
Net property, plant and equipment	119,646,640,000	134,810,627,000	192,633,546,000	204,025,303,000	207,110,412,000	210,558,261,000
Total non-current assets	160,034,932,000	172,080,225,000	281,127,048,000	293,515,403,000	300,953,569,000	333,655,738,000
Total assets	216,761,021,000	242,489,246,000	354,776,235,000	361,476,999,000	389,662,176,000	404,785,145,000
Current liabilities	16,885,889,000	22,553,200,000	32,802,506,000	49,312,291,000	46,815,020,000	57,946,012,000
Non-current liabilities	107,913,040,000	122,367,525,000	216,859,310,000	196,768,338,000	215,134,240,000	225,010,464,000
Total liabilities	124,798,929,000	144,920,725,000	249,661,816,000	246,080,629,000	261,949,260,000	282,956,476,000
Stockholders equity	91,962,092,000	144,920,725,000	105,114,419,000	115,396,370,000	127,712,916,000	121,828,669,000
Retained earnings	52,581,755,000	97,568,521,000	52,597,568,000	63,006,308,000	74,427,738,000	77,227,658,000

Facts:

• Total cash was Php 31 billion in the trailing twelve months.
• Current assets were Php 71 billion in the trailing twelve months.
• Net property, plant and equipment was Php 211 billion in the trailing twelve months.
• Non-current assets were Php 334 billion in the trailing twelve months.
• Total assets were Php 405 billion in the trailing twelve months.
• Current liabilities were Php 58 billion in the trailing twelve months.
• Stockholders equity was Php 122 billion in the trailing twelve months.
• Retained earnings were Php 77 billion in the trailing twelve months.

Explanation:

• Total cash was erratic in movement in the last five years and it increased 15 percent from 2014 to 2018.
• Current assets had grown 56 percent in five years.
• Net property, plant and equipment increases year-over-year and has grown 73 percent in five years.
• Net property, plant and equipment represent 53 percent of the total assets.
• Non-current assets represent 77 percent of total assets.
• Total assets have grown 80 percent in five years.
• Current liabilities represent 20 percent of total liabilities.
• Non-current liabilities represent 82 percent of the total liabilities.
• Total liabilities represents 70 percent of total liabilities and stockholders equity.
• Stockholders equity represents 30 percent of the total liabilities and stockholders equity.
• Retained earnings represents 63 percent of stockholders equity.

Interpretation

The balance sheet was stable. However, the company is utilizing more of creditors money than that of the shareholders investments from the company, in other terms, the creditors have more stakes than the shareholders. Total debt is greater by 75 percent against the stockholders equity.

 

3. INCOME AND MARKET

	2014	2015	2016	2017	2018	2019
Revenue	86,759,386,000	85,173,952,000	89,163,269,000	119,391,303,000	131,572,084,000	126,148,155,000
EBIT	23,093,515,000	25,218,714,000	26,551,002,000	34,397,385,000	36,874,863,000	31,400,758,000
Net Income	16,705,184,000	17,603,797,000	20,002,582,000	20,416,442,000	21,707,603,000	18,490,435,000
EBITDA	31,902,851,000	33,360,244,000	38,715,225,000	45,690,873,000	48,937,537,000	47,343,776,000
Market Capitalization	315,684,000,000	306,854,000,000	306,854,000,000	305,750,000,000	258,267,000,000	251,664,000,000
Intrinsic Value	249,741,775,326	309,067,785,513	363,779,625,016	568,374,432,825	466,764,451,508	796,320,851,627

Facts:

• Revenue was Php 128 billion in the trailing twelve months.
• EBIT was Php 31 billion in the trailing twelve months.
• Net income was Php 18 billion in the trailing twelve months.
• EBITDA was Php 47 billion in the trailing twelve months.
• Market capitalization was Php 252 billion in the trailing twelve months.
• Intrinsic value was Php 796 billion in the trailing twelve months.

Explanation

• Revenue increases year-over-year and has a growth of 52 percent in five years.
• EBIT increases year-over-year and has grown 60 percent in five years.
• Net income increases year-over-year and has grown 30 percent in five years.
• Net income represents 17 percent of revenue.
• EBITDA increases year-over-year and has grown 53 percent in five years.
• Market capitalization is lower by 173 percent against intrinsic value.
• Intrinsic value was higher by 216 percent against market capitalization.

Interpretation

The company is profitable and has not seen any negative in its bottomline in the last five years. Its bottomline increases year-over-year, the management was able to generate sufficient revenue for the operation of the business.

 

4. AP FINANCIAL RATIOS

	2014	2015	2016	2017	2018	2019
Asset turnover (average)	0.42	0.37	0.3	0.33	0.35	0.32
Return on assets %	8.14	7.67	6.70	5.70	5.78	4.74
Return on equity %	18.6	18.58	19.74	18.52	17.86	15.00
Debt/Equity	1.02	1.10	1.90	1.54	1.50	1.63
Return on invested Capital %	11.93	11.14	9.66	9.13	9.49	8.46
Interest coverage	4.68	4.47	4.26	3.39	3.38	2.81

Facts:

• Asset turnover was averaging 0.32 in the trailing twelve months.
• Return on assets were 4.74 percent in the trailing twelve months.
• Return on equity was 15 percent in the trailing twelve months.
• Debt/Equity was 1.63 in the trailing twelve months.
• Return on invested capital was 8.46 percent in the trailing twelve months.
• Interest coverage was 2.81 in the trailing twelve months.

Explanation

• Asset turnover indicates that the company generates 0.32 centavos of sales for every one peso investment in assets.
• Return on assets indicates that every peso invested in assets generates 4.74 centavos of net income.
• Return on equity  means that every one Peso of equity, the company generated 15 centavos in profit.
• Debt-to-equity ratio means for every Peso of the equity its shareholders own the company owes Php1.63.
• Return on invested capital was 8.46 percent or 8 centavos for every Peso invested in the company.
• Interest coverage means that the company is making more than enough money to pay its interest obligations.

Interpretation

Financial ratios show that the company is performing acceptably. 

 

5. AP KEY EXECUTIVES

 

Name	Title	Effective
Emmanuel V. Rubio	President, Chief Executive Officer	January 1, 2020
Erramon I. Aboitiz	President and Chief Operating Officer	September 1, 2018
Liza Luv T. Montelibano	Chief Financial Officer – Power Generation Group	January 2, 2014
Ma. Racquel J. Bustamante	First Vice President & CFO – Generation Business Group	July 1, 2018
Ma. Chona Y. Tiu	First Vice President and Chief Financial Officer – Power Distribution Group	January 2, 2014
Manuel Alberto R. Colayco	Corporate Secretary	March 1, 2018
Joseph Trillana T. Gonzales	General Counsel of AboitizPower	January 1, 2015

Facts:

• Emmanuel V. Rubio –  President, CEO
• Erramon I. Aboitiz – President and COO
• Liza Luv T. Montelibano – CFO Power Generation Group
• Ma. Raquel J. Bustamante – First VP and CFO – Generation Business Group
• Ma. Chona T. Tiu – First VP and CFO – Power Distribution Group
• Manuel Alberto R. Colayco – Corporate Secretary
• Joseph Trillana T. Gonzales – General Counsel of Aboitiz Power

DIRECTORS ALLOWANCE

Aboitiz Power Corp has not disclosed any compensation of the key executives, however, the Director’s/Committee member and Chairman of the Board per meeting were available as follows:

	Directors/Committee Members		Chairman of the Board
(In Php)	From	To	From	To
Monthly Allowance per Meeting	120,000	150,000	180,000	200,000

 

	Directors/Committee Members		Chairman of the Board/ Committee
(In Php)	From	To	From	To
Board Meeting	100,000	150,000	150,000	200,000
Committee Meeting	80,000	100,000	100,000	130,000

 

6. AP LOBBYING AND CONTRIBUTIONS

THERE WAS NO LOBBYING AND CONTRIBUTIONS FOUND FOR ABOITIZ POWER CORP IN OPENSECRET.ORG AND OTHER SOURCES.

 

7. AP FINANCIAL STRENGTH

DATA

Working capital	41,894,000,000
Total assets	389,662,176,000
Sales	126,148,155,000
EBIT	31,400,758,000
Market value of equity	251,664,000,000
Book value of total liabilities	261,949,260,000
Retained earnings	74,427,738,000

CALCULATION

	Ratio	Score	Result
A – Working Capital / Total Assets	0.11	1.20	0.13
B – Retained Earnings / Total Assets	0.19	1.40	0.27
C – EBIT / Total Assets	0.08	3.30	0.27
D – Market Value of Equity / Book Value of Total Liabilities	0.96	0.60	0.58
E – Sales / Total Assets	0.32	1.0	0.32
Z-Score			1.56

 

Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E

 

Explanation:

Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.

Interpretation

The Z-Score of Aboitiz Power Corp was 1.56. Dr. Altman’s grading scale of 1 to 1.8 indicates that the company will declare bankruptcy in the future. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency. Total liabilities represents two-thirds of the total liabilities and equity.

OVERVIEW

The balance sheet is stable. The company is utilizing more of creditors money in its business operation than that of the investors money. The earnings per share is Php 2.51 which is an acceptable ratio. Moreover, based on the calculation of its intrinsic value the stock of AP is undervalued.

CITATION

https://aboitizpower.com/

https://www.morningstar.com/stocks/xphs/ap/quote

Researched and written by Criselda