Ayala, San Miguel empires feel pandemic impact on earnings slide

MANILA, Philippines — Ayala Corp. and San Miguel Corp. saw their earnings more than halved in 2020 after the coronavirus pandemic smashed their businesses in all fronts.

What's new

Ayala's net income plummeted 51% year-on-year to P17.1 billion in 2020 while San Miguel's bottomline sagged by a bigger 55% annually to P21.9 billion, according to separate disclosures to the stock exchange on Thursday.

Why it matters

Ayala and San Miguel are two of the Philippines' biggest conglomerates with a combined market capitalization of P783.7 billion, and employ thousands. They have interests in key industries like food, utility and infrastructure, and power, whose operations had either been halted or greatly disrupted by the pandemic and lockdowns that came with it.

What the companies say

Despite an overall bad year for both conglomerates, earnings had started to recover on a quarter-on-quarter basis in the final 3 months of 2020, supposedly as the economy gained some of its lost momentum with eased restrictions.

“While it has not been a good year for all businesses and our economy overall, we’re encouraged by the sustained recoveries that our businesses showed in the second half. There are still so many challenges ahead — and a lot of uncertainty but we believe our economic recovery is underway," Ramon Ang, San Miguel president and chief operating officer, said.

His Ayala counterpart, Fernando Zobel de Ayala, said: “We expect this trajectory to continue and lead to a full economic revival by 2022 as mobility further improves and as the country executes on the vaccination rollout as planned.” 

By the numbers

• Both Ayala Land and AC Energy recorded a 74% on-year drop in net income to P8.7 billion and P6.2 billion, respectively. Bank of the Philippine Islands netted P21.4 billion, down 26% annually, while Globe Telecom Inc.'s bottomline fell 16% year-on-year to P16.6 billion. AC Industrials narrowed its net loss to P1.8 billion from P2.4 billion.
   
• For San Miguel, net income of San Miguel Food and Beverage Inc. fell 31% year-on-year to P22.4 billion. Petron Corp. had it worse, incurring a net loss of P11.4 billion. On the flip side, SMC Global Power's net income grew 31.2% to P18.9 billion.

On Thursday, shares in Ayala inched down 0.77% to P773 each while San Miguel lost 2.42% to P121 per share.