AboitizPower Turns Earnings Surge and Chromite Capital Return Into Debt Reduction

Philippine power producer posts 32% revenue growth as stronger electricity prices, new generating capacity and a gas investment lift first-half results.

Aboitiz Power Corp. converted a sharp rise in first-half earnings and a multibillion-peso return of capital from Chromite Gas Holdings Inc. into an opportunity to reduce debt accumulated during a period of acquisitions and expansion.

The power producer reported ₱121.19 billion in operating revenue for the six months ended June 30, 2026, up 32% from ₱92.06 billion a year earlier. Operating profit increased 50% to ₱21.89 billion from ₱14.57 billion, as revenue growth outpaced the increase in operating expenses.

Net income attributable to AboitizPower shareholders climbed 45% to ₱18.42 billion, from ₱12.67 billion in the year-earlier period. Earnings per share advanced to ₱2.56 from ₱1.76. Consolidated net income, including earnings attributable to minority shareholders, rose to ₱20.14 billion from ₱14.04 billion.

The results reflect a business benefiting from stronger electricity-market prices while bringing recently acquired and newly completed assets into its earnings base.

AboitizPower said the ₱29.13 billion revenue increase was driven by stronger energy prices, higher contracted capacity, new solar plants, and the first contribution from the Caliraya-Botocan-Kalayaan hydroelectric complex, which was turned over in February. Energy sold by the generation and retail-supply businesses rose 17% to 22,764 gigawatt-hours, while the segment’s earnings before interest, taxes, depreciation and amortization increased 29% to ₱39.9 billion.

The company also benefited from a full six months of earnings from Chromite Gas Holdings, or CGHI. AboitizPower owns 40% of CGHI, which holds interests in the Ilijan gas-fired power plant, a 1,320-megawatt combined-cycle facility and an associated liquefied-natural-gas import and regasification terminal. AboitizPower completed the CGHI acquisition in January 2025 for a total acquisition price of ₱54.62 billion, including ₱8.02 billion of contingent consideration and transaction-related costs.

Earnings from associates and joint ventures increased 11% to ₱10.32 billion, from ₱9.31 billion. The company attributed the increase partly to CGHI’s full first-half contribution, along with improved earnings from Cebu Energy Development Corp. and dividends from Abaqa International Pte. Ltd.

Cash Generation Strengthens Before Working-Capital Demands

One measure of the underlying improvement appeared in the cash-flow statement. Operating income before changes in working capital rose 39% to ₱30.26 billion, from ₱21.75 billion in the first half of 2025. The increase showed that the core business produced substantially more cash before accounting for the timing of receivable collections, inventory purchases and supplier payments.

That strength was partly absorbed by working-capital requirements. Trade and other receivables consumed ₱8.05 billion of cash, compared with ₱752 million a year earlier, while inventory growth used another ₱2.70 billion. Trade and other payables provided ₱5.17 billion, offsetting part of those demands.

As a result, net cash generated from operations before taxes slipped to ₱24.07 billion from ₱25.28 billion, despite the increase in underlying operating income. After taxes, net cash from operating activities was ₱20.67 billion, compared with ₱21.89 billion a year earlier.

The distinction is important. Reported operating cash flow declined modestly, but the decrease resulted principally from working-capital absorption rather than weaker operating performance. Receivables increased as higher revenue and balances related to the CBK acquisition outpaced collections during the period.

Chromite Returns Capital

A second source of cash came from CGHI itself.

During the first half, CGHI partially redeemed preferred shares held by AboitizPower subsidiary Therma NatGas Power Inc., returning ₱29.48 billion of capital. The payment was reported as proceeds from the redemption of shares under investing activities, rather than as revenue or operating profit.

The redemption helped swing AboitizPower’s investing cash flow to an inflow of ₱20.03 billion, compared with an outflow of ₱52.09 billion in the first half of 2025, when the company funded the original CGHI investment. The 2026 inflow also absorbed ₱9.80 billion of additions to property, plant and equipment and ₱4.26 billion of investment additions.

CGHI’s redemption reduced the carrying value of AboitizPower’s investment in the company to ₱32.56 billion at June 30, from ₱58.98 billion at the end of 2025. The decline reflected the capital returned through the preferred shares, partly offset by AboitizPower’s share of CGHI earnings and other equity-accounting movements. AboitizPower retained its 40% ownership interest and continuing exposure to the gas and LNG assets.

From Acquisition Financing to Deleveraging

AboitizPower directed its broader pool of operating cash and investment proceeds toward debt repayment, effectively recycling capital from the CGHI investment back into the balance sheet.

The company used ₱36.60 billion of net cash in financing activities during the first half, reversing the ₱20.35 billion financing inflow recorded a year earlier. Financing outflows included ₱7.27 billion of net short-term loan repayments, ₱14.42 billion of long-term debt repayments, ₱9.98 billion of interest payments and ₱16.32 billion of dividends to shareholders. Those uses were partly funded by ₱13.55 billion of new long-term borrowings.

Management said the financing outflow reflected repayment of short-term loans obtained in 2025 to fund the CGHI acquisition, as well as repayments of long-term debt. Short-term loans fell 9% to ₱72.77 billion at June 30 from ₱80.01 billion at the end of 2025, despite additional borrowing for the CBK acquisition and working-capital needs.

Because corporate cash is fungible, the financial statements do not trace each peso of the ₱29.48 billion redemption directly to a particular loan. Still, the sequence is clear: CGHI returned capital, AboitizPower generated stronger underlying earnings, and the group repaid acquisition-related bridge financing and other obligations during the same period.

Total interest-bearing debt, including lease liabilities, declined by roughly ₱6.9 billion to ₱325.63 billion, from ₱332.53 billion at the end of 2025. Cash and cash equivalents rose 6% to ₱62.66 billion, leaving the company with both less debt and more cash.

Net debt fell by ₱8.55 billion to ₱258.47 billion, from ₱267.03 billion. The group’s gearing ratio improved to 53.95% from 55.44%, comfortably below its stated ceiling of 70%. Its current ratio also increased to 0.9 times from 0.8 times, reflecting higher cash and receivables and the reduction in short-term borrowings.

The net-debt-to-equity ratio remained at 1.2 times; however, changes in debt were accompanied by equity growth. Equity attributable to shareholders increased by ₱5.81 billion to ₱206.54 billion after first-half profit exceeded the ₱16.43 billion of dividends declared for the period.

The result is a form of capital recycling common in infrastructure investing. AboitizPower initially borrowed to help fund a strategic investment, received part of that capital back through the redemption of preferred shares, and used the resulting liquidity alongside stronger earnings to reduce the financing burden. It retained its common-equity exposure to CGHI’s earnings while recovering a large part of the capital committed to the venture.

For investors, the first-half report carries two messages. AboitizPower’s expanded generation portfolio is producing faster growth in revenue, profit and pre-working-capital operating cash generation. At the same time, management has begun directing the financial benefits of that expansion toward a balance sheet that had grown more leveraged after a series of large acquisitions.

The challenge will be sustaining that progress as capital spending continues and interest costs rise. Interest expense and other financing costs increased 16% to ₱10.11 billion in the first half. For now, however, stronger operations and the Chromite preferred-share redemption have given AboitizPower room to lower net debt without abandoning its expansion program or materially reducing shareholder distributions.

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Disclaimer: This is for informational purposes and is not investment advice. Figures come from company disclosures and exchange data; valuation ratios reflect the author’s calculations based on cited inputs.