Ayala Corp profit up 22% to P12.8 B

MANILA, Philippines - Ayala Corp. (AC), the country’s oldest conglomerate, posted a hefty profit growth last year, driven by its banking and property businesses.

In a regulatory filing, AC said its net earnings rose 21.6 percent to P12.77 billion last year from P10.5 billion a year ago “on the back of sustained robust performance of its real estate and banking businesses.”

Without the impact of the accelerated depreciation from its telecom unit’s network transformation initiative, AC’s net income would have improved 28 percent to P14.8 billion.

To continue the double-digit growth trajectory, the holding firm will spend around P190 billion this year for the investment programs of existing businesses and the ramp up of new ventures, a top company official said.

“We are encouraged by the strong performance across our business units as they reap the benefits of the aggressive growth strategies they started a few years back,” said AC president and chief operating officer Fernando Zobel de Ayala.

“In turn, we have also been able to optimize earnings Ayala Corp. and value at the parent level as we continued to rebalance our portfolio and adjusted our ownership, particularly in our banking and water units, over the past year,” he added.

AC’s equity earnings jumped 23 percent to P17.6 billion in 2013.

For 2014, the conglomerate said it allotted roughly P190 billion in capital expenditures “to continue its investment programs in its real estate, banking, telecommunications and water businesses, as well as to ramp up its new businesses.”

“As we ramp up our power business and as the economic environment remains sound, we are optimistic we can sustain double-digit earnings growth through 2014,” Zobel said.

AC spent around P120 billion last year to fund the various growth initiatives of its real estate, telecommunications and water units. It also acquired additional stakes in Bank of the Philippine Islands (BPI) and Manila Water Co. Inc. as it invested in the power and transport infrastructure space.

For its operating units, profits of property giant Ayala Land Inc. (ALI) surged 30 percent to a record P11.7 billion on the back of double-digit revenue growth and stable margins across its business segments.

ALI recorded P81.5 billion in total revenues, up 36 percent from its year-ago level as its property development, commercial leasing and construction businesses continued to post gains.

For the banking segment, BPI reported a 15-percent increase in net income to P18.8 billion, primarily driven by higher interest income as the bank’s loan portfolio picked up 21 percent.

Core net income of Globe Telecom rose 13 percent to P11.6 billion. Consolidated service revenues of P90.5 billion, was up nine percent from last year, “led by the continued growth in mobile telephony and the demand for data connectivity across its mobile, broadband and fixed line businesses,” the company said.

Water concessionaire Manila Water recorded a five-percent uptick in net earnings to P5.8 billion due to higher billed volume and increased contribution from new businesses in Laguna, Boracay, Clark and Vietnam.

For the international business, Integrated Microelectronics Inc. nearly doubled its net income to $10.5 million last year due to business expansion in Europe and the Philippines despite a contraction in the electronics sector.

AC’s business process outsourcing unit LiveIt said its net income hit $1.7 million, an improvement of $15.8 million over the previous year’s loss.