Ayala Corp. income soars 39%, bolstered by banking business

MANILA, Philippines — The Zobel family conglomerate Ayala Corp. booked robust profit growth in the past year with contributions led by record earnings at Bank of the Philippine Islands (BPI).

The holding company’s net income in 2023 reached P38.1 billion, a gain of 39 percent.

Core earnings—which removes one-off items—soared 48 percent to P41 billion, surpassing record high core profits booked before the recent global health crisis.

“We succeeded in getting aggregate core earnings to exceed the prepandemic high. Now, we focus on getting better operating and financial results from each of our businesses, and on rationalizing the portfolio where it makes sense to do so,” Ayala President and CEO Cezar P. Consing said in a stock exchange filing on Wednesday.

Ayala, which is in the midst of realigning its business portfolio by shedding noncore assets to focus on main and emerging business lines, noted that BPI posted a 30.5-percent profit surge to a record P51.7 billion during the past year.

Realigning business portfolio

This was attributed “to strong loan growth, higher margins and lower provisions” as the bank expanded its asset base amid higher interest rates.

Ayala Land’s net income also grew 32 percent to P24.5 billion as major business segments, led by its commercial division, booked gains.

READ: Ayala Land sets plan to double profits in five years

ACEN Corp. said income from operating units jumped nearly three times to P4.9 billion as it added new operating capacity and strengthened its net seller position.

When accounting for the impact of one-off events, ACEN’s profit slumped 43 percent to P7.4 billion.

READ: Accounting adjustments axe ACEN’s 2023 earnings by 43%

At the same time, Globe Telecom’s profits shed 29 percent to P24.6 billion, partly due to the absence of previous gains from the sale of data centers in 2022.

Another major division, AC Industrials, narrowed core losses by 29 percent to P1.2 billion, on improved manufacturing and motoring income.

The company’s emerging health care division, AC Health, completed new acquisitions and partnerships to grow its portfolio.

Acquisitions

“Acquisitions have bolstered growth, however, net income remains slightly negative due to one-offs and higher manpower and marketing expenses,” Ayala said in the filing.

More recently, it took a minority stake in the 65-year-old St. Joseph Drug, giving it a significant footprint in Northern Luzon.

READ: Ayala buys into popular North Luzon chain St. Joseph Drug

Overall capital expenditures for the Ayala Group last year dropped 12 percent to P247.7 billion, reflecting slower spending at Globe.

Meanwhile, Ayala aims to raise around $350 million to $400 million from the planned sale of its stake in the operator of the Light Rail Transit Line 1 and its remaining stocks in Manila Water Co., the group’s chief finance officer Alberto de Larrazabal said in a previous interview.

This was part of the conglomerate’s plan to raise about $1 billion from the sale of noncore assets.