Ayala net profit up 23% to P6.1B

Conglomerate Ayala Corp. boosted its first-semester net profit by 23 percent year-on-year to P6.1 billion as strong earnings by its property, banking and water units offset the slight decline in contribution from its telecom unit.

Excluding nonrecurring items, core net income for the first six months went up 35 percent to P6.3 billion. The accelerated depreciation of Globe Telecom as a result of its network modernization program and the revaluation gains realized at AG Holdings in the first half of 2011 made up the one-off items.

The higher profit was driven by the strong equity earnings from Ayala Land, Bank of the Philippine Islands and Manila Water while Globe Telecom was weighed down by accelerated depreciation.

On the other hand, Ayala’s business process outsourcing unit LiveIt achieved continued growth and margin improvement in the first half, reducing losses from this segment.

Equity earnings of core and noncore businesses reached P7.7 billion in the first semester, 24-percent higher than the level achieved in the same period last year.

“We are encouraged to see the strong trajectory of our core businesses sustained through the first half of this year. The performance reflects the robust domestic demand and the fundamental strength of the economy. We envision our products and services to continue to tap this growing demand as we expand to new market segments and develop a more pervasive presence across the country,” Ayala president and chief operating officer Fernando Zobel de Ayala said in a statement.

In BPO, Ayala’s share in revenues reached $166 million, up 9 percent year-on-year while its share in cash flow or earnings before interest, taxes, depreciation and depreciation reached $13.1 million, up 26 percent due primarily to improved profitability at Stream and Affinity Express. Doris C. Dumlao