Ayala Corp profit up 5% at end-March

The country’s oldest business house Ayala Corp. chalked up a net profit of P8 billion in the first three months, up by 5 percent year-on-year, on higher earnings across its core real estate, banking and telecommunication businesses.

The group also booked P1 billion in nonrecurring accounting gains from the merger of its education arm with the Yuchengco group’s iPeople.

Ayala reported healthy equity earnings contribution from its business units, which grew seven percent to reach P9.9 billion. Equity earnings contributions of Globe Telecom, Ayala Land and Bank of the Philippine Islands grew by 44 percent, 15 percent and 5 percent, respectively in the first quarter.

“Our first-quarter results show the advantages of a diversified portfolio. The strong performance of Ayala Land, Globe and BPI offset the challenges from Manila Water’s water supply issues and the market conditions facing AC Industrials,” Ayala president and chief operating officer Fernando Zobel de Ayala said in a disclosure to the Philippine Stock Exchange on Friday.

“In addition, capital generated from the closing of the transactions in AC Education and AC Energy provide a boost for funding new investments and reducing debt at the parent level,” Zobel noted.

Apart from the gains from the merger of its education business with iPeople, Ayala will receive gross proceeds of $573 million from the partial sale of AC Energy’s thermal assets to Aboitiz Power following the completion of the transaction on May 2.

AC Energy recorded a net income of P2.5 million in the first quarter, dropping from its year-ago profit level of P593 million, as higher interest expense from a green bond issuance, lower wind regime and a scheduled outage of a thermal plant gnawed on bottom line.