Ayala Q1 income rises as subsidiaries shine

Publicly listed Ayala Corp. grew its first-quarter net profit by 42 percent to P3.5 billion year on year, driven by a double-digit growth in the real estate, banking and water businesses earnings.

In a disclosure to the Philippine Stock Exchange on Friday, Ayala said the three-month profits were fueled by a 35-percent rise in equity earnings in turn driven by subsidiaries Ayala Land Inc., Bank of the Philippine Islands and Manila Water Co.

The conglomerate also reported significant improvements in its electronics and business process outsourcing (BPO) businesses during the period.

The investee companies of its BPO holding company, LiveIt, reported combined revenues of $255 million of which LiveIt’s share was $83 million, which in turn grew by 12 percent year on year. The conglomerate said greater scale and cost efficiencies resulted in its share of cash flow—based on earnings before interest, taxes, depreciation and amortization—growing by 18 percent to $7 million. This in turn reduced the BPO holding firm’s net loss, which was primarily due to acquisition-related charges.

Total revenues grew by 16.6 percent to P29.14 billion from a year ago.

“We are encouraged by the sustained growth trajectory of our core businesses and the improving performance of our international businesses. Domestic consumption remains robust, which continues to benefit our core businesses. We continue to pursue our capital investment and expansion plans, taking advantage of this favorable macroeconomic environment and ensure we sustain our growth momentum moving forward,” said Ayala president and chief operating officer Fernando Zobel de Ayala.

The publicly listed operating units of Ayala that earlier reported year-on-year expansions in first-quarter profits are the following:

— Ayala Land, which grew net profits by 31 percent to P2.1 billion led by the strong growth in the residential business;

— BPI, which grew net profits to a record-high P5.8 billion from only P2.8 billion a year ago as hefty treasury earnings added to the growth in interest earnings;

— Manila Water, which grew net profits by 64 percent to P1.3 billion due to strong growth in sales volume coupled with tariff increase at the start of the year;

— Integrated Microelectronics, which jacked up net profits by 128 percent to $853,900 due to the company’s business expansion in Europe and Mexico alongside the reduction in operating expenses.

On the other hand, Globe Telecom reported a 7 percent decline in core net profit at P2.7 billion.

Ayala is looking to participate in selected infrastructure projects under the government’s public-private partnership (PPP) program. The company recently tied up with Metro Pacific Investments Corp. to jointly pursue light rail transit projects in Metro Manila after winning the first road project under the PPP scheme.

Ayala recently raised P10 billion through a corporate bond issue to gear up for potential capital requirements.—Doris C. Dumlao