Ayala Corp. nets nearly P20B

Diversified conglomerate Ayala Corp. grew its net profit in the first nine months by 11 percent year-on-year to P19.6 billion, driven by robust earnings contribution from the banking, real estate and automotive businesses.

Equity earnings from Bank of the Philippine Islands and Ayala Land Inc. climbed by 23 percent and 17 percent, respectively while equity earnings from Ayala Automotive nearly tripled during the period.

“As they execute on their individual 2020 strategies, our businesses continue to perform well and within targets. As we develop new investments, we are happy to see our power business emerging to be a significant player in the space. With 1,000 megawatts (MW) in attributable capacity, AC Energy is beginning to be a major contributor to the country’s energy requirements. Further, we expect it to be a meaningful part of Ayala’s portfolio in the next five years,” Ayala president and chief operating officer Fernando Zobel de Ayala said in a press statement on Friday.

Ayala seeks to double its annual net profit to hit P50 billion by the year 2020 under a five-year vision that seeks to grow all operating units and expand the group’s position across Southeast Asia.

In the first nine months, equity earnings contribution from Ayala’s business units amounted to P23.6 billion, 10 percent higher year-on-year.

Ayala Land recorded a net income of P15.1 billion in the first nine months, marking a 17 percent-growth year-on-year driven by higher revenues from its residential development and commercial leasing segments as well as commercial lot sales.

Strong gains from its core banking, trading, and fee-based businesses sustained the Bank of the Philippine Islands’ net earnings in the first nine months, climbing by 26 percent to P17.4 billion from its year-ago level.

Globe Telecom’s nine-month net income declined by 17 percent from the previous year to P11.7 billion on higher operating expenses, depreciation and non-operating charges mostly incurred in the third quarter related to the acquisition of San Miguel Corp.’s telecom assets.

Manila Water’s net income rose by 6 percent in the first nine-months to P4.9 billion largely driven by strong growth of its domestic businesses, supported by the steady expansion of Manila Concession.

Early this year, Ayala set up a new unit, AC Industrials, to house the group’s investments in industrial technologies to take advantage of opportunities in emerging trends in the global automotive manufacturing space. Through Integrated Micro-Electronics and Ayala Automotive, Ayala seeks to leverage the group’s experience and expertise in automotive electronics and distributorship to assemble a portfolio of investments in vehicle manufacturing, assembly, retail, and top-tier technologies.

On a combined basis, Ayala’s industrial technologies portfolio reached a net income of P1.5 billion in the first nine months, 25 percent higher than a year ago on solid performance of automotive dealership.

IMI registered a net income of $20.8 million, 5 percent lower year-on-year, as productivity improvements were tempered by higher depreciation expenses. On the other hand, Ayala Automotive sustained its earnings trajectory with a nearly threefold expansion in net income to P492 million in the first nine months – largely driven by higher dividend income from Isuzu Philippines and robust sales in the Isuzu and Honda brands.

In September, Ayala Automotive opened its flagship dealership of KTM motorcycles in Bonifacio Global City. The dealership forms part of Ayala Automotive’s partnership with KTM AG, the largest motorcycle manufacturer in Europe, to distribute and manufacture motorcycle models in the Philippines under the KTM brand.

Equity earnings of AC Energy expanded nearly threefold in the first nine months as operating levels of its power generation plants significantly improved. It recorded a net income of P1.2 billion, 28 percent lower year-on-year owing to the absence of capital gains from the partial sale of its stake in North Luzon Renewable Energy Corp. realized in the previous year.

In September, AC Energy achieved its target of building 1,000 MW in attributable capacity as the construction of the first unit of its 2×668 MW power plant GNPower Dinginin in Mindanao went full swing. To date, AC Energy has seven thermal, wind, and solar power generation assets, with five operating plants delivering 1,000MW of power to the grid.

The two plants under construction, GNPower Kauswagan and GNPower Dinginin, are expected to add another 1,200MW to the grid in 2018 and 2019, respectively. AC Energy aims to assemble another 1,000MW in attributable capacity by 2020, 60 percent of which will be renewable energy.

In transport, AC Infrastructure posted a nine-month net income of P59 million, driven by revenues from the three public-private partnerships in its portfolio. As of October, Light Rail Manila Corp., which operates and maintains LRT1, has increased the number of light rail vehicles by 19 percent since it took over the system last year. The Muntinlupa-Cavite Expressway is now serving a daily average of close to 26,000 vehicles as of October, while the Beep ticketing system has sold over 2.5 million cards, accumulating around P3.9 billion in transactions across rail, bus, and tollroad systems since its launch last year.