Ayala Corp. launches another P 10-B stock buyback

Conglomerate Ayala Corp. earmarked an additional P10 billion for its stock buyback program in a bid to support shareholder value during this prolonged pandemic.

In a disclosure to the Philippine Stock Exchange on Monday, Ayala announced that its board had approved the additional budget, thus doubling the capacity of the conglomerate to purchase its own shares from the open market.

Ayala’s board approved an initial P10 billion for a share repurchase program on Dec. 5, 2019.

Companies with sufficient earnings typically resort to stock buybacks when they feel that their shares are undervalued by the market.

The country’s oldest conglomerate, which has interests in property, banking, telecommunications, energy, water utility, health care and manufacturing, among others, is currently valued by the stock market at around P538.5 billion.

Meanwhile, the company’s board also approved a regular cash dividend of P3.46 per share for the second semester ending on Dec. 31 this year. The record date is Dec. 24, while payment date is on Jan. 7, 2022.

Ayala’s reported net income at end-September rose by 70 percent year-on-year to P19.4 billion, attributed to the improved performance of most of its business units. The bottom line included gains from the partial divestment of the group’s thermal assets and AC Health’s acquisition of Qualimed Health Network earlier in the year.

In the third quarter alone, stripping out the impact of one-off gains, Ayala’s core net income grew by 27 percent year-on-year to P6 billion, driven by higher contributions from Ayala Land, Globe Telecom, AC Energy, AC Health and AC Ventures.