Ayala eyes return to prepandemic profit levels in 2023

MANILA, Philippines – The Zobel family’s flagship holding firm Ayala Corp. expects business to recover to prepandemic levels this year after profits slipped 1.4 percent to P27.4 billion in 2022.

The country’s oldest conglomerate, whose interests span real estate, telecommunications, banking, healthcare and infrastructure, recorded several one-off items for the year.

These included asset sales by Bank of the Philippine Islands and Globe Telecom and a write off ACEN Corp.’s sale of coal assets and impairment charges from its investment in Myanmar-focused Yoma Group.

Removing non-recurring items, Ayala said core income grew 18 percent to P27.7 billion in 2022.

Ayala president Cezar Consing said the company will continue to grow with the Philippine economy in 2023.

“With strengthening macro, our businesses should get back to or exceed prepandemic levels in 2023,” he said in a statement on Friday.

Profits last year were equivalent to about 78 percent of net income in 2019.

The group is also scaling down capital spending investments for the year to P264 billion from P280.3 billion in 2022.

Ayala said it would allocate P19.4 billion of the amount for “investment opportunities.”

Meanwhile, its revenues in 2022 jumped nearly 20 percent to P306.65 billion compared to the previous year.

“Our full year results demonstrate the strength and diversification of our portfolio. If 2022 was marked by revenge spending on the part of consumers, 2023 may well see the resurgence of the economy as a whole,” Consing said.

The conglomerate’s balance sheet remained robust with a 2022 debt-equity-ratio of 0.80, up 12 basis points and within its debt convents. Net debts ended at P149.3 billion.

Banking and telecommunications were the main drivers of core income last year.

BPI ended 2022 with a net income of P39.6 billion, up 66 percent, due the sale of property and strong gains in its core business. Expenses for bad credit also fell 30 percent as the economy bounced back last year.

Ayala Land also saw net income climb 52 percent to P18.6 billion on expanding commercial lot sales and mall and office rentals.

The property giant will also upsize capital spending in 2023 by 17 percent to P85 billion this year.

Globe Telecom’s profit increased 46 percent to P34.6 billion on robust data usage and the sale of data centres and cell towers. Service revenues during the period rose 4 percent to P158 billion.

ACEN Corp. booked a net income of P13.1 billion, which was mainly due to “revaluation gains” from the takeover of UPC Australia.