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Ayala ’16 profit up 17%

/ 01:05 AM March 14, 2017

Ayala Corp., the country’s oldest business house, chalked up a net profit of P26 billion last year, rising by 17 percent from the previous year, on the back of double-digit growth contributions from its real estate and banking units alongside new contribution from power and industrial technologies.

“Ayala capped its five-year strategic target in 2016 with net income expanding nearly threefold and a 23 percent compounded annual growth rate since we put the plan in place in 2011. We believe this was achieved through our disciplined execution and a strong domestic environment,”


Ayala president and chief operating officer Fernando Zobel de Ayala said in a statement.

Return on equity last year improved to 12.6 percent, significantly improving from 8.8 percent five years ago.

Ayala’s new five-year plan is to double its net profit to P50 billion by 2020; boost return on equity (ROE) to 15 percent; expand equity earnings contribution of businesses outside its four largest business units (banking, property, telecommunications and water utility) to 20 percent and increase the earnings contribution of international businesses to 10 percent.

“I think we’re on track [with the new five-year vision]. It won’t be a straight line but we’re building the business,” Ayala chief finance officer Teodoro Limcaoco said in a briefing, adding that of the new businesses, AC Energy and AC Industrials, would likely account for the biggest contribution in the coming years.

Equity earnings contribution from Ayala business units expanded by 14 percent to P32 billion. Earnings contribution from Bank of the Philippine Islands and Ayala Land jumped by 19 percent and 18 percent, respectively. Equity earnings from AC Energy expanded by 27 percent, while equity earnings from AC Industrials soared by 51 percent as its automotive business surged by nearly fivefold during the year.

AC Energy recorded a 25-percent expansion in net earnings during the year to P2.7 billion. This sustained earnings trajectory was attributed to strong equity earnings contribution from its operating assets on improved operating efficiencies, boosted by gains from value realization from its partial sale of shares in South Luzon Thermal Energy Corp.

Equity earnings from AC Energy’s investee companies climbed by 67 percent to P1.8 billion on higher operating efficiencies of GNPower Mariveles and the successful start of operations of South Luzon Thermal Energy Corp.’s second unit.

AC Energy ended last year with close to 1,300 megawatts of attributable generation capacity after investing close to $800 million to build up its portfolio, Limcaoco said.

AC Infrastructure, meanwhile, continues to execute on its three public-private partnership projects.


Early last year, Ayala set up AC Industrials to house the group’s investments in industrial technologies, namely Integrated Micro-Electronics and AC Automotive, to take advantage of opportunities in emerging trends in global manufacturing.

On a combined basis, Ayala’s industrial technologies portfolio reached a net income of P1.8 billion during the year, 29 percent higher than the previous year as its automotive business contributed significant profit growth, lifted by robust vehicle sales across all brands as well as higher contribution from its distribution businesses.

In electronics manufacturing, IMI posted a net income of $28.1 million (P1.3 billion), 2 percent lower than the year-ago level owing to transaction and financing costs related to strategic acquisitions and foreign exchange headwinds from the Chinese renminbi.

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