Tuesday, August 9, 2011

MANILA, Philippines--AboitizPower (PSE ticker symbol: AP) has been assigned the highest possible rating by the Philippine Rating Services Corporation (PhilRatings) for the company's bonds and corporate notes, proclaiming these to be "of the highest quality with minimal credit risk". According to PhilRatings, the "PRS Aaa" rating it gave to AboitizPower indicates the company's "extremely strong capacity to meet its financial commitment".

The PRS Aaa rating covers AboitizPower's P3.89-billion (bn) Corporate Notes and P3-bn Fixed-Rate Bonds. The corporate notes will mature in 2013 and 2015 while the fixed-rate bonds will mature in 2012 and 2014.

PhilRatings is the country's pioneer domestic credit rating company. It assigns ratings for debt issues, commercial papers and bonds or notes issued by companies in various sectors. In its rating, PhilRatings considered AboitizPower's consistent robust operating profit from a diverse portfolio of operating subsidiaries. It also focused on the solid track record of the Aboitiz management team in power and other industries, along with its prudent business and financial policies. AboitizPower's capacity to compete effectively and efficiently in a more competitive power industry also helped boost the ratings assessment.

AboitizPower's business portfolio includes both power generation and power distribution. It runs hydro, geothermal, coal-fired and oil-fired power plants and oil-fired power barges. The company has over 70 years of experience in the development, financing and operation of power generation facilities.

The company continues to be one of the country's leading providers of energy, with a total attributable capacity of 2,051 MW as of the end of 2010. It also has an ownership stake in seven power distribution utilities.

A tradition of commendation

Prior to the announcement of PhilRatings, AboitizPower and Erramon Aboitiz, in his capacity as president and CEO of holding company Aboitiz Equity Ventures, Inc. have also earned outstanding recognition in Asiamoney's Best Managed Company Awards 2010.

Every year, the international financial magazine recognizes the top small, medium and large cap companies in each major country in the Asian region and also singles out one outstanding executive.  For the Philippines, AboitizPower was named Best Large Cap Company and Erramon Aboitiz, the country's Top Executive.

The Best Managed Company and Top Executive awards are industry recognitions and not based on an open poll with completed questionnaires.  Asiamoney journalists speak to people in the industry - CEOs, CIOs and senior executives from fund management and hedge fund companies, as well as senior analysts in brokerages across Asia. Companies are measured against a list of criteria including profitability, market leadership and innovation.

AboitizPower also prominently ranked in seven categories in the 11th annual Best Companies in Asia poll conducted by FinanceAsia, the publication of choice for the Asian investment community. FinanceAsia's awards, which are given per major Asian country, are considered an industry benchmark. Every year, the magazine solicits nominations and votes from more than 300 investors and analysts across the region.

In the Best Managed Company category, AboitizPower ranked 2nd, improving its 6th  ranking in 2010. For Best Corporate Governance, AboitizPower stayed steady at 6th, same as last year. In the category of Best Investor Relations, AboitizPower ranked 3rd from last year's 7th place. For Best CSR, AboitizPower improved its ranking to 3rd place from last year's 7th spot. In the Most Committed to a Strong Dividend Policy category, AboitizPower landed in 4th place from last year's 6th.

Profit boost

AboitizPower's profitability was greatly lifted by its acquisition of the Tiwi and Makiling-Banahaw geothermal facilities, and its becoming the Independent Power Producer Administrator (IPPA) of the Pagbilao coal power plant, both  in 2009. Its net income increased by 335% from P5.8 bn in 2009 to P25.1 bn in 2010.

The company's profitable acquisitions in the past two years substantially increased its yearly cash flow and built up a sizeable cash reserve. These provide a significant cushion relative to the amount of debt obligations of the company. As of end 2010, AboitizPower had a cash reserve of P18.3 bn, with P27.3 bn in cash generated from operations during the year.

This greatly strengthened profitability firms up AboitizPower's equity, resulting in a continued improvement in capitalization. As of end 2009, its debt to equity ratio is 2.18 while debt to equity ration as of 2010 is 1.33.

PhilRatings sees AboitizPower as well placed to pursue opportunities that will result from the planned implementation of Retail Competition and Open Access beginning December 26, 2011, together with the government's thrust towards the use of renewable energy.

AboitizPower continues to be committed to finding a balanced mix of harnessing power from renewable and non-renewable sources to meet the energy needs of the country. The company intends to bid for other IPPAs, other targeted assets being sold by Power Sector Assets and Liabilities Management Corp., as well as other hydro power plants that may be offered for privatization by government. The company is also in various stages of certain brown and Greenfield projects in Davao, Cebu and  Subic. This will further augment the country's power capacity, as well as strengthen AboitizPower's presence in the energy industry.

AboitizPower is the holding company for the Aboitiz Group's investments in power generation, distribution, retail and power services.  It is a major producer of Cleanergy, its brand for clean and renewable energy in the Philippines with several hydroelectric and geothermal assets in its generation portfolio and also has non-renewable power plants located across the country. The company owns distribution utilities that operate in high-growth areas in Luzon, Visayas and Mindanao. www.aboitizpower.com and www.cleanergy.com.ph .)