Aboitiz faces headwinds from oil surge but keeps cautious optimism | Business Brief

Added: 2026-05-06

[00:00:00]Aboitiz Power [music] posts a strong first quarter surge with net income up 71% despite pressures from rising fuel costs and the Middle East crisis.

[00:00:09][music] The energy arm of Aboitiz Equity Ventures says operations remain stable with fuel cost cost shocks largely passed through under existing power [music] supply agreements. While the Middle East conflict is putting pressure on Aboitiz, the group says it [music] remains cautiously optimistic. Cher Sullit returns with the details.

[00:00:30]>> [music] >> The Middle East crisis is putting pressure on Aboitiz Equity Ventures, but the conglomerate is keeping a cautiously optimistic outlook. The active portfolio manager of the Aboitiz Group says that the rising oil prices have driven up costs across its businesses, particularly in logistics and packaging materials. AEV Chief Financial Officer and Corporate Information Officer Toto Hilado notes that the higher costs may be passed on or absorbed depending on how consumers respond.

[00:00:59]If consumer spending weakens, this could affect either margins or sales volume.

[00:01:05]But, this is still an evolving situation and really depends on when the Middle East crisis will be resolved. Aboitiz Foods has noted that the weaker foreign exchange rates have also slightly increased landed raw material expenses.

[00:01:21]The company warns that prices could continue to rise toward the end of the year and into 2027 due to higher fertilizer costs and climate risks that may affect crop supply. We manage these impacts by continuously searching for and taking advantage of operational efficiencies and more disciplined cost management. Aboitiz Power, the energy arm of AEV, says that operations are stable for now with no disruptions linked to the global conflict. But, higher fuel import costs are beginning to put pressure on its base load plants.

[00:01:55]Nonetheless, the company adds that the existing power supply agreements allow fuel cost shocks to be passed through rather than absorbed, helping cushion the impact. Our priority, of course, is to ensure that none of this translates into a supply disruption for our customers and for the communities that we serve.

[00:02:13]Long term, I guess the impact is not as clear. Um one thing we're we're watching out for on the power side, obviously, is uh potential reduction in demand as a result as a result of higher cost.

[00:02:24]Aboitiz Power notes that the crisis highlights the need to accelerate the country's shift to renewable energy.

[00:02:30]Aligned with this, AEV's earmarking 62 billion pesos in capital expenditures to Aboitiz Power to expand its generation portfolio. The power distribution arm says it will prioritize capital discipline, efficient resource management, and effective execution this year, expecting continued growth in its renewable energy and energy storage platforms. Despite the ongoing geopolitical uncertainty, we remain committed to our our core strategic objectives, right? Our sustainable growth, portfolio diversification, delivering long-term value to our customers and stakeholders, all while contributing to the energy reliability and security of the country.

[00:03:11]Aboitiz InfraCapital, the group's infrastructure investment platform, says it hopes geopolitical tensions would ease, allowing airport revenue growth to continue into the second half of the year. With several projects in the pipeline, the company's preparing for new partnerships, which will further strengthen its capacity to pursue opportunities. Despite headwinds from global uncertainty, the Aboitiz Group continues to bank on long-term growth and resilience across its businesses.

[00:03:40]Cher Sullit, Billionaire News Channel.