Conglomerate Ayala Corp. grew its net profit last year by 11 percent to P35.3 billion as robust property, banking and telecom businesses plus large divestment gains made up for the sharp devaluation of its water business and losses from its industrial business.
Excluding one-off items, Ayala’s core profit for 2019 amounted to P31.1 billion, up by 3 percent from the previous year, Ayala chief financial officer Teodoro Limcaoco said in a text message. Core earnings were mostly driven by its property, banking and telecom businesses.
Ayala generated P23.6 billion in divestment gains from AC Education and AC Energy in 2019 but financial results were tempered by a hefty P18.1-billion loss from the lower valuation of its interest in beleaguered water concessionaire Manila Water Co. as well as the P2.4 billion in losses incurred by AC Industrials.
“The events of the past year have challenged the stability of our corporate momentum over the last decade. However, Ayala has proven its resilience across multiple business cycles over the 186 years that we have been in operation,” Ayala chair and chief executive officer Jaime Augusto Zobel de Ayala said in a disclosure to the Philippine Stock Exchange on Thursday.
The group came under attack from no less than President Duterte last year, leading to the cancellation of Manila Water’s concession beyond 2022, nullifying a 15-year extension to 2037. This resulted in a massive sell down of the firm’s shares in the stock market.
“This ability to deal with adversity has been built on our fundamental strengths of adhering to the highest standards of corporate governance, always looking to develop value over the long term, remaining flexible to adjust to changing circumstances and constantly aligning our business objectives with the broader development needs of the country,” Zobel said.
Ayala’s core businesses—property, banking and telecom businesses—all posted double-digit growth in profits in 2019. Ayala Land’s profit grew by 13 percent to P33.2 billion while those of Bank of the Philippine Islands and Globe Telecom were up by 25 percent and 20 percent to P28.8 billion and P22.3 billion, respectively.
AC Energy posted a profit of P24.6 billion while AC Industrials recorded net loss of P2.4billion.
Integrated Micro-Electronics Inc. (IMI) posted a net loss of $7.8 million while AC Motors recorded a net loss of P337 million.
Manila Water’s net profit dipped by 16 percent to P5.5 billion.