results of operations - Aboitiz

We intend to list
Aboitiz Power
Corporation (APC)
on the Philippine
Stock Exchange
through an initial
public offering.
AEV will put all its
distribution assets
in APC and make it
the Philippines’only
truly integrated
power company.
FOOD
The food group again turned in a very
strong performance, increasing its income
contribution to AEV by 34%.
Volumes in the flour business were sluggish
and remained at par with that of 2005.
Feed volumes, on the other hand, grew by
an aggregate 18%, coming from increases
in internal use and from commercial sales.
It was a year characterized by high volatility
in the prices of raw material and consistent
increase in both local and international
freight rates. In spite of this, the group was
successful in managing its profit margins.
Fil-Am Foods continued to finalize its
expansion plans for breeder and finisher
From the mill, sacks of flour are shipped direct to the
widest network of dealers throughout the country.
farms in Luzon, as well as for another
feedmill in Mindanao. These projects are
expected to come on line towards the latter
part of 2007 and beginning of 2008.
Pilmico divested 50% of its holdings in its
joint venture yeast business and is
now focusing on projects in
the flour business, as well
as on new ventures that
may come forward.
OUTLOOK
We approach our
future with great
optimism, excitement
and high expectations of
what we, as a group, will
achieve through initiatives
we are ready to implement.
All our companies are
powered for growth.
Power
As disclosed on January 11, 2007 and
approved by AEV shareholders on February
27, 2007, we intend to list Aboitiz Power
Corporation (APC) on the Philippine Stock
Exchange through an initial public offering
(IPO). AEV will put all its distribution assets
in APC and make it the Philippines’ only truly
integrated power company.
Through this IPO, we intend to raise capital
to continue our expansion in the power
sector through investments in new projects.
On April 25, 2007, the Power Sector Assets
and Liabilities Management Corporation
(PSALM) turned over the 360-MW Magat
hydro complex to SN Aboitiz Power.
We have began upgrading the facility to
improve efficiency and production.
Our Norwegian partners SN Power are
also conducting studies on the possible
expansion of the plant’s facilities.
After winning a competitive bid to supply
power to Davao Light, Hedcor is developing
the 42-MW Sibulan and 31-MW Tamugan
hydro projects in the Davao area. We hope
to break ground on the Sibulan project in
the first half of 2007.
We will continue to vigorously bid for
selected Napocor assets and expand our
generation business with greenfield plants
especially in areas where they can work
with our distribution utilities.
6 ABOITIZ EQUITY VENTURES ANNUAL REPORT 2006