ACEN FY23 profit: P7.4-B (down 43%)

ACEN [ACEN 3.80, down 2.6%] [link], the Zobel Family’s renewable energy holding company, posted an FY23 net income of P7.4 billion, which was 43% lower than the P8.6 billion it made in FY22. ACEN traced the underperformance to what it called “accounting adjustments from various events”, such as the booking of a P2 billion impairment related to ACEN’s “India platform” for “cost overruns and project delays.” ACEN said that consolidated revenues were up 4% to P36.5 billion, with income from operations up 81% to P8.1 billion. Core operating earnings (overhead, development costs, and financing costs deducted) improved to P4.9 billion, which ACEN said is “triple” what it earned using a similar metric last year. ACEN said that if non-cash items are ignored from FY23 and FY22, its “profitability increased 150 percent”.

MB bottom-line: ACEN is essentially making a “high bar” argument, that the P8.6 billion in non-cash gains in FY22 from the revaluation of ACEN Australia unfairly obscures the improvements in ACEN’s actual business of electricity sales. That’s fairly persuasive, but it’s interesting to note that ACEN didn’t make that big of a deal of that chunky non-cash gain in FY22 when it propped up net income during a period when “challenges in Philippine operations” caused income from operations to stumble. In FY22, ACEN didn’t include a paragraph about how its profitability looked without that non-cash gain. Maybe I’m making a bigger deal out of it than I need to, but I don’t love it when companies try to have it both ways.

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