Dynamic Marketing Communiqué

Sustainability and Security: How Aboitiz Power continues to thrive in the competitive PH energy market [Monday Marketing Marvels]

March 30, 2020

“We energize the dreams and hopes of the Filipino people for a better future.”

Over the past two decades, Aboitiz Power has provided ample and reliable power supply across different parts of the country, offering reasonable and competitive prices.

The company also prioritized social development and environmental awareness, creating informative campaigns for their stakeholders and launching their own brand of renewable energy.

Established in 1998 as a subsidiary of Aboitiz Equity Ventures, Aboitiz Power is one of the largest power companies in the Philippines.

As more infrastructure projects are being developed across the country, major businesses and companies require high energy levels to keep their operations running effectively.

To keep up with these needs, the company makes use of different types of energy, establishing run-of-the-river and large hydro plants, geothermal facilities, solar plants, along with oil and coal facilities.

This helps provide a steady combination of sustainable and renewable energy to different areas of the country.

Aboitiz Power has also made significant investments in development, making sure their facilities operate to their maximum capacity and have solid environmental and safety records.

A part of their marketing strategy is launching campaigns that promote environmental awareness and sustainability. One of these campaigns is BetterWorld, which aims to increase awareness of the company’s stakeholders, informing them of the company’s initiatives that focus on supporting the people, planet, and profit.

They have also launched their own brand of renewable energy called Cleanergy. This is a brand that utilizes Aboitiz Power’s sustainable energy portfolio that consists of geothermal, solar, and hydro energy. These campaigns have helped push the company towards an environmentally-friendly direction, assuring stakeholders and consumers that they are investing in safe and clean energy.

Community support is also one of the priorities of the company, launching projects such as tree seeding, medical and dental missions, school building, and scholarship programs.

These programs tie-in well with providing sustainable and safe energy that powers up communities and cities in the country, which is one of their main goals. This also bodes well for their long-term growth, which is important in the country’s highly-competitive energy industry.

The company engages with major businesses and industries, while also offering in energy retail, which provides energy solutions to consumers. Electrical installation is also another one of their services, ensuring that homes and facilities are safely wired to prevent electrical hazards. They also provide power generation and distribution services, which are significant income contributors, generating PHP 18.15 billion and PHP 4.05 billion in 2018, respectively.

Power generation deals with supplying power to clientele under power supply contracts and procurement agreements. Power distribution handles the sale of energy to high-end users such as major companies and industry players. This balanced portfolio allows them to cater to different levels of the market, thus expanding their share in a very challenging industry.

Their efforts have helped Aboitiz Power grow its revenue during the past few years, generating PHP 131.57 billion in 2018.

  • 2017 – PHP 119.39 billion
  • 2016 – PHP 89.16 billion
  • 2015 – PHP 85.17 billion

With a strong focus on growth, Aboitiz Power looks to increase their long-term value, making them more attractive to shareholders, while helping power up different areas in the country.

Aboitiz Power’s Earning Power: Valens Research vs. As-reported numbers

Aboitiz Power makes for a great case study that we come back to regularly. One great reason?

The company has proven itself to be a phenomenal earning power generator.

So, how well has Aboitiz Power been growing its business in the past years?

The research doesn’t lie—nor do the results. Earning power (the blue bars) continues to show results much higher than what traditional databases show.

The blue bars in the chart above represent Aboitiz Power’s earning power (Uniform Return On Assets). These numbers have been positive, going over 14% 9 times for the past 14 years.

The global ROA average is just 6%

The orange bars are the company’s as-reported financial information. If you relied on these numbers, you’d just see the 6.1% orange bar for the 2018 as-reported ROA (return on assets, a measure of earning power), instead of the 14.9% adjusted ROA.

That’s what you’ll see in Yahoo Finance, Google Finance, and most other databases.

The company’s stock price also performed better than the rest of the stock market over the decade, which we can see in the blue line in the chart below. Their returns have been well above the market.

The numbers show that they are doing well and making a profit.

The Philippine energy industry is highly competitive, with major players such as Meralco and the Energy Development Corp. having large shares in the country. Despite this, Aboitiz Power was able to thrive due to its commitment to providing reliable and sustainable energy.

Their initiative to improve and develop their technology to improve their service has benefited the company and the people, giving them a solid track record.

About The Dynamic Marketing Communiqué’s
“Monday Marketing Marvels”

Too often, industry experts and the marketing press sing the praises of some company’s marketing strategy.

…Only for the audience to later find out that their product was a flop, or worse, that the company went bankrupt.

The true ROI in marketing can’t be separated from the business as a whole.

What good is a marketing case study if one can’t prove that the company’s efforts actually paid off?

At the end of the day, either the entire business is successful or it isn’t. And the role of marketing is always paramount to that success.

Every Monday, we publish a case study that highlights the world’s greatest marketing strategies.

However, the difference between our case studies and the numerous ones out there, is that we will always make certain that the firm really did generate and demonstrate earning power worthy of study in the first place (compliments of Valens Research’s finance group).

By looking at the true earnings of a company, we can now rely on those successful businesses to get tips and insights on what they did right.

We’ll also study the greatest marketing fails and analyze what they did wrong, or what they needed to improve on. We all make our mistakes, but better we learn from others’ mistakes—and earlier, rather than later.

Hope you found this week’s marketing marvel interesting and helpful.

Stay tuned for next week’s Monday Marketing Marvels!

Cheers,

Kyle Yu
Head of Marketing
Valens Dynamic Marketing Capabilities
Powered by Valens Research
www.valens-research.com