Aboitiz Equity Ventures Inc. is allotting capital expenditures of P22 billion this year, excluding the purchase of power plants, while earmarking P72 billion for greenfield power projects in the next five years.

In a briefing, AEV president Erramon Aboitiz said the bulk of this year’s capex will be for the rehabilitation of existing power plants, after an acquisition binge last year, while P1.8 billion will be for the acquisition of new vessels for its transport business, and P200 million for AEV’s food unit.

Aboitiz said the firm spent about P30 billion last year adding that the five year capex will be funded by internally generated cash, project finance loans as well as possible capital infusion from prospective partners.

Subsidiary Aboitiz Power Corporation plans to expand its coal generation portfolio across the country over the next five years as part of its P72 billion organic expansion activities.

These projects include the deferred construction of a 300-megawatt coal plant in the Subic freeport zone in Olongapo in partnership with Taiwan Cogeneration Corporation; the expansion of the 232-megawatt STEAG coal plant at the Phividec Industrial Estate in Misamis Oriental, which is a joint venture between AP, German firm Evonik Steag GmbH and La Filipina Uygongco Corporation; and the construction of a new coal plant in Davao.

AP is also keen on expanding the 700-megawatt Pagbilao coal plant in Quezon, whose output is contracted by the company from TeaM Energy Corporation, the facility's operator.

Aboitiz said that should they push through with all of the projects the company would be able to add an additional 700 megawatts to its power generation portfolio.

While a large portion of which is composed of renewable energy sources, AP is increasing its coal plants, despite its “dirty” reputation, in line with its thrust to diversify its power portfolio.

"Coal can be also a very responsible type of energy source if done properly. Our intention is clearly to be within the Clean Air act and all the requirements set by the government," he said.

At present, AP controls a total power generating capacity of 2,577 megawatts. Of the total capacity, more than 1,200 megawatts are from AP's geothermal and hydro assets.

Earlier, Aboitiz Equity Ventures (AEV) reported a 341 surge in consolidated net income for the first quarter of 2010 to P6.2 billion, translating to an earnings per share of P1.13.

The firm said in a disclosure to the Philippine Stock Exchange that power accounted for 90 percent of the total earnings while the banking and food groups contributed roughly the same at 6 percent each.

However, the transport group turned in a negative contribution.

For the three-month period, AEV registered a non-recurring gain of P308 million versus a P550 million non-recurring income for the same period last year due to the appreciation of the Philippine peso.

Adjusting for this one-off, AEV’s core net income for the quarter still grew at a robust 586 percent from P865 million to P5.9 billion.

“We are pleased with our first quarter results. The combined income contributions from our businesses have had very good growth on top of the 2009 results which was already a good year,” said AEV president Erramon I. Aboitiz.

Aboitiz Power recorded an income contribution of P5.7 billion for the quarter, a significant increase from P290 million from the same period last year.

The power generation business contributed P5.8 billion, up 6,780 percent but, despite the strong growth in electricity sales, the power distribution business recorded a 13 percent drop in its earnings contribution to AEV, from P191 million to P167 million.