Ayala profit down to P5B in Q1

Conglomerate Ayala Corp. chalked up a P5-billion net profit in the first quarter, down by 8 percent year-on-year, as the comparative earnings last year included non-recurring gains from the sale of shares in a business process outsourcing unit.

Without the effect in 2014 of the P1.8-billion divestment gain from its BPO business, Ayala’s first quarter earnings jumped by 39 percent year-on-year.

The increase in core profitability was attributed to the sustained positive momentum in its real estate, banking, telco and electronics manufacturing businesses, while new ventures, particularly power generation, moved to the execution phase.

“We continue to be encouraged by the strong performance of the businesses across the group. We remain optimistic that we can sustain the strong first quarter results throughout the rest of the year, and stay on track to meet our strategic goals and financial targets,” Ayala president and chief operating officer Fernando Zobel de Ayala said in a statement on Wednesday.

The positive earnings momentum in the first quarter was further reflected by the 11-percent sequential growth from the strong fourth quarter results in 2014.

Various operating units contributed a total of P6.4 billion in equity earnings, 27 percent higher year-on-year in the first quarter. Compared to net income inclusive of the net divestment gain in the same period last year, equity earnings declined by 7 percent.

In real estate, Ayala Land booked a 19-percent growth in net earnings to P4.1 billion, boosted by a 13-percent growth in real estate revenues.

In banking, the Bank of the Philippine Islands posted a 36-percent year-on-year growth in first quarter net income to P4.9 billion.

In telecommunications, Globe Telecom’s bottom line increased by 43 percent over the same period last year to P4.2 billion. Gross service revenues increased by 13 percent, driven by the growth in data revenues across all major service lines.

In electronics manufacturing services, Integrated Microelectronics Inc. reported an increase in net profit to P288 million vis-à-vis the first quarter last year on better margins, cost savings and improved productivity.

The strong performance of these real estate, banking, telco and manufacturing units counterbalanced results from the remaining businesses in the portfolio.

In utilities, Manila Water Co. Inc. reported a flat net income at P1.4 billion, with stronger billed volume levels offsetting higher operating expenses.

In power generation, Ayala said recent investments in power had come into fruition and started operations.

In April, AC Energy Holdings Inc. secured the feed-in-tariff for the 81-megawatt (MW) wind farm of the North Luzon Renewable Energy Co. and the 19-MW expansion of Northwind Power Development Corp.

In addition, AC Energy commenced in April commercial operations for the first 135-MW unit of South Luzon Thermal Energy Corp.

As of end-March, the cash hoard of the parent company reached nearly P43 billion.