Ayala Group net profit surges 34% to P9.8B

MANILA, Philippines - The strong performance of its core business units allowed Ayala Corp. (AC), the country’s oldest conglomerate, to grow its profits by a third in the first semester.

In a regulatory filing, AC said its net income reached P9.8 billion in the first half, up 34 percent from a year ago.

“The strong growth was driven by the solid performance of its core businesses, particularly Ayala Land Inc. (ALI), Globe Telecom Inc. and Manila Water Co. Inc.,” AC said.

“Equity earnings from Globe Telecom, which quadrupled year-on-year, more than offset the decline in the contribution of banking unit Bank of the Philippine Islands (BPI), which registered lower trading gains in the first half of this year,” it added.

AC said the substantial improvement in equity earnings from its  international businesses also boosted earnings in the first semester.

“We are very pleased to see our core businesses continuing their strong earnings momentum. This attests to the strength of the broader business environment in the country,” said AC president and chief operating officer Fernando Zobel de Ayala.

Specifically, the first half equity earnings included a P1.8-billion net gain from LiveIt’s sale of Stream Global Services Inc. Total equity earnings in the first half rose 35 percent to P12.8 billion.

The conglomerate said the core business units largely outperformed in the six-month period.

Property giant ALI posted a 25-percent surge in net income to P7.1 billion as the positive momentum in the real estate sector continued. Real estate revenues picked up 24 percent to nearly P43 billion as its residential, commercial leasing, and construction businesses posted strong double-digit growth.

Globe Telecom’s profits spiked 385 percent to P6.8 billion in the first half as the accelerated depreciation from the network transformation program tapered. Revenues improved seven percent to P47.7 billion from P44.5 billion.

Utility firm Manila Water recorded an eight-percent growth in earnings to P3.2 billion given a six-percent gain in consolidated revenues.

“The strong performance of these core businesses offset the 33-percent decline in BPI’s net income, which was reported at P8 billion in the first half of 2014,” AC said.

AC said it saw a significant improvement in its international businesses. Integrated Microelectronics Inc. posted a five-fold improvement in net income in the first half to $11.3 million while consolidated revenues jumped 23 percent to $431 million.

“We remain optimistic that this momentum can continue given the government’s ongoing reforms and the efforts to push for vital infrastructure projects that can unleash development opportunities and address critical bottlenecks,” Zobel said.

AC recently committed to invest P24 billion in the power and transport infrastructure sectors. It won the Light Rail Transit 1 Extension project  in partnership with the Metro Pacific Group, and was the highest complying bidder, together with the Aboitiz Group, for the Cavite-Laguna Expressway project.

Since 2012, AC set out to invest a total of $1 billion in energy and infrastructure projects through 2016. It has so far committed equity of close to $500 million in various power and transport infrastructure projects.