Ayala group spends nearly P12B to raise stake in Ayala Land | Inquirer Business

Ayala group spends nearly P12B to raise stake in Ayala Land

/ 04:14 PM August 12, 2022

The Zobel family conglomerate Ayala Corp. spent P11.82 billion over two days to buy more shares at its flagship property arm, Ayala Land Inc., continuing its business realignment strategy.

The country’s oldest business group said on Friday it was the buyer of 468.67 million Ayala Land shares at P25.20 each on Aug. 9 and Aug. 12 this year. The 3.2 percent stake raises Ayala’s holdings in the real estate giant to 50.5 percent.

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“This transaction reflects our continued optimism on Ayala Land’s growth trajectory. We believe that its current share price presents deep value and significant upside in the long term,” Ayala president and CEO Fernando Zobel de Ayala said in a statement.

“With a stronger economic position in Ayala Land, we believe that this transaction benefits the long-term interest of Ayala’s shareholders,” he added.

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Ayala announced the deal as earnings in the first half year charged higher by 56 percent to P16.3 billion, led by contributions from business units, including property.

The moves were also in sync with the group’s strategy to sell $1 billion in noncore assets while raising investments in core segments.

Ayala earlier sold its toll road business to billionaire Manuel Villar Jr. It plans to raise another P22 billion selling its stake in the Light Rail Transit Line 1 and power assets.

“Their increased stake in ALI is a commitment to the strategy of staying in their core businesses, especially during challenging times,” Jonathan Ravelas, financial strategy consultant at e-Methods for Business Management Corp., told the Inquirer.

“In this situation, the theme is to steady the course,” he added.

Ayala Land shares, down over 22 percent since the start of the year, rose 1.6 percent to P28.50 on Friday. Ayala Corp. added 1.81 percent as the Philippine benchmark index rose 0.28 percent.

First half profit

On Friday, Ayala said profits in the first half were boosted by Bank of the Philippine Islands (BPI) and Ayala Land, offsetting the slowdown at renewable energy firm, ACEN Corp.

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It also expected positive prospects for the second semester, with the resurgence of economic activity and asset sales at its telecommunications unit, Globe Telecom.

“Our group’s performance in the first half reflects the momentum of the country’s reopening,” Zobel said in a separate statement.

Ayala said BPI saw profits jump 73 percent to P20.4 billion, driven by higher revenues and the sale of property.

BPI revenues added 20 percent to P57.6 billion while expenses for bad loans fell 23 percent to P5 billion as business activity recovered in the first semester.

Ayala Land profits also climbed 34 percent to P8.1 billion, bolstered by all revenues and commercial lot sales.

Zobel noted that “current macroeconomic” had nevertheless impacted the group “in varying degrees.”

“While this is the case, we believe that there is still growth to be realized for the rest of the year with what we are seeing on the ground,” he added.

Globe’s P71-B cell tower deal

Globe’s first half profit increased 51 percent to P19.7 billion on higher sale and an P8.5 billion net gain from the partial sale of its data center business.

The telco giant is poised to reap another windfall in the third quarter after sealing a P71-billion sale and leaseback deal involving over 7,000 cell towers with third-party operators.

Meanwhile, ACEN’s net income dropped 19 percent to P2.2 billion in the fist half. This was mainly due to the “higher cost of purchased power during a major preventive maintenance outage at [South Luzon Thermal Energy Corp.], curtailment related to Typhoon Odette, and a one-time buyout expense related to a customer contract.”

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TAGS: Ayala group, Ayala Land, realignment, strategy
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