Ayala Corp. mustered comeback in Q3, but profit still down 59%
The country’s oldest business house Ayala Corp. reported a rebound in third quarter earnings coming from a difficult second quarter, when the toughest lockdowns were imposed by the government to curb the COVID-19 pandemic.
With the improvement in mobility, business operations and overall economic activity due to the gradual easing of quarantine protocols, Ayala’s third quarter net profit more than doubled to P3.4 billion quarter-on-quarter. Compared to the same quarter last year when the COVID-19 pandemic had yet to depress the global economy, however, its net profit declined by 59 percent.
“We are hoping to see this trajectory sustained in our businesses with a further loosening of restrictions,” Ayala president and chief operating officer Fernando Zobel de Ayala said in a disclosure to the Philippine Stock Exchange on Thursday.
For the January to September period, Ayala’s net profit declined by 75 percent year-on-year to P11.4 billion as the pandemic gnawed on core businesses.
In particular, the sharp decline in earnings was cited as a compounded effect of the following: the restricted construction activity and mall operations of Ayala Land since mid-March; the aggressive loan loss provisioning expense of Bank of the Philippine Islands (BPI), especially in the second quarter; and, the base effect from divestment gains in power and education booked in the same period last year.
Meanwhile, the pickup in third quarter net profit was mostly due to the improved performance of Ayala Land and AC Industrials and lower loan loss provisions booked by BPI. There were likewise nonrecurring revaluation losses earlier recognized by Manila Water that were no longer there in the third quarter.
Ayala Land’s third quarter net income accelerated to P1.8 billion from P200 million in the second quarter as mobility and sentiment improved starting September.
BPI’s net income improved by 4 percent quarter-on-quarter to P5.5 billion due to lower loan loss provisions.
Globe Telecom’s third quarter net income declined by 11 percent quarter-on-quarter to P4.4 billion due to bigger advertisement and promotion costs and nonoperating expenses.
AC Energy’s third quarter net income decreased by 54 percent quarter-on-quarter to P1.1 billion in the absence of revaluation gains.
AC Industrials narrowed its third quarter net loss to P224 million from P1.3 billion in the second quarter as plant operations normalized.
