Ayala eyes new investments

MANILA, Philippines - Sitting on a huge cashhoard, conglomerate Ayala Corp. is scouring for new market opportunities to ignite and sustain growth, with around P13 billion allotted for acquisitions.

John Eric T. Francia, Ayala managing director and head of Corporate Strategy, said the conglomerate has cash of P26.5 billion as of end-September 2009, half of that already available for investments in new and existing businesses.

While he refused to say which areas the group is looking at, he said these potential investments would further strengthen the group’s balance sheet.

“We’re still looking for the next frontiers of growth for the company. There’s no strict timetable for the deployment of available cash resources.  If we find an opportunity which we think is value accretive then we will go for it,” Francia said.

“We’re not going to be rushed into investing in a sector just for the sake of…,” Francia pointed out.

The Ayala conglomerate remains keen on investing in the renewable energy business.

With the passage of the Philippine Renewable Energy Act, that gives fiscal incentives and priority at the grid to operators of renewable energy power plants, it has opened up a mad rush of new investment prospects.

The Ayalas have long been trying to break into the energy  sector, particularly in clean and green energy. Earlier reports said they were in talks to acquire a significant stake in Energy Development Corp., the Lopez family’s geothermal crown jewel.

Ayala is currently one of the biggest, most respected, and most widely diversified conglomerates in the Philippines, with leadership positions in real estate development, banking and financial services, telecommunications, electronics and information technology, water infrastructure development and management, and car dealership.

Ayala Corp. reported a 13 percent growth in its net profit for the third quarter this

year to P1.7 billion, largely driven by the continued steady growth across its core busines units. This brings the group’s total net earnings for the nine months ending September this year to P5.8 billion or a decline of 26 percent year on year.  Excluding gains from share sales realized last year, the nine-month net income result would be 14 percent higher than the previous level.

Combined equity earnings from core business units, Ayala Land, Inc. (ALI), Bank of the Philippine Islands(BPI), and Globe Telecom(Globe) rose  16 percent during the third quarter  as their net earnings registered strong growth..

This was, however, offset by the mixed performance of units under AC Capital.

From January to September 2009, equity earnings remained steady at P6.8 billion.