Ayala net income declines 38% to P3.15 B in 2000

Ayala Corp., the holding firm for the Ayala family’s various business concerns, reported a 38- percent drop in its net income last year due to the overall economic weakness that cut down on the profitability of its two major subsidiaries.

"Ayala’s financial results mirror the substantial declines in profitability experienced by two major operating businesses, the major dampening effects to the economy and business community of the political crisis, and the volatility in the interest rates and foreign exchange market towards the second half of 2000," a company statement said.

Based on an unaudited consolidated income for the year 2000, Ayala Corp. earned P3.15 billion, down from P5.11 billion in 1999. Although telecom unit Globe Telecom and food arm Pure Foods Corp. posted higher profits, this was largely offset by the heavy drop in income of two, major subsidiaries Ayala Land Inc. (ALI) and Bank of the Philippine Islands (BPI).

Ayala Corp.’s. 72-percent subsidiary Ayala Land netted P1.8 billion in net income or 29 percent lower than the previous year due to the overall sluggish demand in the property sector. Its consolidated revenues reached P10.3 billion, mainly coming from leasing operations and land sales. During the year, ALI continued to strengthen its rental portfolio through the ongoing Greenbelt redevelopment and EDSA-Taft retail projects, Residential lot sales proved to be resilient as Ayala Westgrove Heights and Ayala Greenfield Estates recorded take-up rates of 78 percent and 49 percent, respectively, by year-end.

In banking, its 41.5-percent subsidiary BPI registered a net profit of P3.05 billion, 35 percent lower than a year ago, due to lower net interest income, increased loss provisions, as well as the one-time merger related expenses with the acquisition of Far East Bank & Trust Co.

Meanwhile, Globe Telecom and Pure Foods marked higher income of 65 percent and 22 percent, respectively. Globe, a 45.5 percent subsidiary, earned P1.55 billion while Pure Foods, which is 92.6 percent owned by Ayala Corp. contributed P888.4 million in net profit for the year.

Aside from these companies, the widely-diversified Ayala group also has stakes in other businesses like hotels (Ayala Hotels); agribusiness (Ayala Agricultural Development Corp.); electronics and information technology (iAyala, Ayala Systems Technology Inc., EDINet Philippines, Integrated Microelectronics); insurance (Ayala Insurance); utilities (Manila Water Co.); automotive (Honda Cars Philippines); industrial Park (Cebu Holdings); and retail (Pilipinas Makro).