Conglomerate Ayala Corp. grew its nine-month profit by 70 percent year-on-year to P19.4 billion as one-time gains added to higher earnings contributed by its banking, property, telecom, energy and water businesses.
The country’s oldest business house has now delivered 83.5 percent of the P23.21 billion earnings that Bloomberg market consensus expects it to attain for the whole of this year.
Taking out the impact of divestment gains, higher bank loan loss provisions, revaluation losses, and the net retroactive effect of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, Ayala’s core profit was flat at P19.3 billion during the nine-month period. Likewise netting out divestment gains incurred in 2019, core net income translated to 83 percent of Ayala’s prepandemic level.
This year, earnings were bumped up by gains from the partial divestment of the group’s thermal assets and AC Health’s acquisition of Qualimed Health Network.
In the third quarter alone, stripping out the impact of extraordinary gains, Ayala’s core net income still grew by 27 percent year-on-year to P6 billion, driven by higher profit contribution from its property, telecom, energy, health care and venture capital businesses.
The group completed the sale of 45 percent of its stake in the GN Power Kauswagan coal facility in September. Gains from the divestment totaled P3.5 billion, including revaluation gains on the retained interest.
“The improving business environment demonstrates how organizations have adapted and readjusted themselves more than a year into the pandemic. With the pace of inoculation ramping up, we look forward to a further reopening of the economy and sustaining this positive trajectory,” Ayala president and chief executive officer Fernando Zobel de Ayala said in a disclosure to the Philippine Stock Exchange.
The three core businesses of Ayala all posted better year-on-year results during the nine-month period:
- Ayala Land’s net income grew 35 percent to P8.6 billion, as business operations continued to improve despite the reimposition of stricter quarantine restrictions;
- BPI’s net income improved by 1.8 percent to P17.5 billion due to lower loan loss provisions
- Globe’ Telecom’s net income rose by 13 percent to P18 billion on the back of gross service revenue improvement, lower nonoperating charges, and the positive impact of the CREATE Act that made up for higher operating expenses and depreciation.
Meanwhile, renewable energy arm AC Energy also posted a nine-month net income growth of 22 percent year-on-year to P4.3 billion.