Ayala Corp. nets P16.1B

The country’s oldest conglomerate Ayala Corp. grew its net profit in the first semester by 7 percent year-on-year to P16.1 billion driven mostly by its real estate, telecommunications, and power businesses.

In the second quarter alone, Ayala recorded a net income of P8.4 billion, up 3 percent year-on-year, mainly driven by Ayala Land and AC Energy, which posted transaction gains from value realization initiatives. Lower fee-based income and higher operating expenses recorded by Bank of the Philippine Islands tempered net earnings during the quarter.

Six-month equity earnings of the conglomerate reached P19.5 billion, 12 percent higher from a year ago on robust contributions from Ayala Land and Globe Telecom, which climbed 18 percent and 25 percent, respectively. AC Energy’s equity earnings contribution also more than doubled in the first semester from the same period last year.

“These results validate our long-term strategy to achieve a more resilient portfolio by allocating capital to new businesses from which we can derive fresh sources of growth while continuing to expand our core businesses,” Ayala president and chief operating officer Fernando Zobel de Ayala said.

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“With the steady state operations of its platforms and consistent value realization initiatives, we are happy to see AC Energy starting to provide the necessary balance to some of our more cyclical and longer gestation businesses,” Zobel noted.

It was earlier reported that Ayala Land had expanded its first semester net profit by 18 percent year-on-year to P13.5 billion, primarily driven by its residential segment with some support from the commercial leasing business.

Bank of the Philippine Islands reported a net income of P11.03 billion for the first half, 5.7 percent lower year-on-year, as lower non-interest income and higher operating expenses offset growth in the bank’s core business.

Globe Telecom chalked up a core net income of P10.3 billion in the first semester, up by 29 percent year-on-year.

Manila Water recorded a net income of P3.6 billion in the first half, 10 percent higher from the previous year, driven by the business out of Metro Manila alongside lower depreciation expense.

AC Energy’s net earnings expanded by more than twofold to P2.1 billion in the first semester year, bolstered by its wind, geothermal, and thermal platforms. This was also underpinned by services income derived from the financial closing of a new power plant. Excluding income from services, AC Energy’s net profits jumped by 59 percent year-on-year in the first half.

Equity earnings from AC Energy’s investee companies surged by 82 percent year-on-year to P2 billion in the first half. Fresh contribution from its first greenfield offshore project which started operations in the first quarter, the 75-megawatt Sidrap Wind Farm located in South Sulawesi, Indonesia, contributed to equity earnings during the period.

AC Industrials’ net income climbed by 2 percent higher year-on-year to P752 million, supported by one-time gain by its electronic manufacturing services arm, but dragged by lower net income of its automotive retail segment.

In electronics manufacturing services, Integrated Micro-Electronics Inc. was adversely impacted by higher interest expense, effective tax rate, and foreign exchange losses due to the weakness of the euro and renminbi. Net income reached $31.6 million, including a one-
time gain relating to a sale of property in China as well as a one-off employee relocation expense, also related to the property sale.

In automotive retail, net income fell to P119 million due to weaker sales of Honda and Isuzu partly driven by tempered consumer demand from higher automobile excise taxes.