Ayala nets P2.54B in first semester

Ayala Corp. posted a P2.54-billion net income in the first six months of the year, slightly higher than the P2.45 billion recorded for the same period last year as it continued to benefit from a stable macroeconomic environment and its ongoing debt reduction program.

Ayala disclosed to securities regulators yesterday that it paid off a total of P15.4 billion over the past 12 months, further bringing down its consolidated debt-to-equity ratio to 0.91:1 from 1.29:1 the previous level.

Ayala president and chief executive officer Jaime Augusto Zobel de Ayala II said the significant amount of debt that has already been paid has allowed the company to "capitalize on its trong credit standing and negotiate very favorable terms in refinancing some of its remaining obligations with longer maturities and lower interest rates."

The debt reduction program, which was implemented in the fourth quarter of 2000, is proceeding on schedule, Zobel said.

Interest and other financing charges declined by 31 percent from P3.08 billion to P2.12 billion as debt levels went down and benchmark rates dropped by as much as 800 basis points from their respective levels in the first semester of 2001.

Management, however, noted that this positive development was tempered by lower interest income and the absence of the extraodinary income which resulted from the sale of meat processing unit Pure Foods Corp. to food and beverage giant San Miguel Corp. last year.

In financial services, Bank of the Philippine Islands registered a consolidated net income of P2.66 billion, 24 percent below last year’s level. In real estate, Ayala Land Inc. recorded a P1.07 billion in net income for the first half of 2002, four percent lower than last year. In telecommunications, Globe Telecom sustained its strong growth, posting a consolidated net income of P3.08 billion on revenues of P22.37 billion, improvements of 21 percent and 45 percent respectively over the same period in 2001.

Despite the prevailing difficult business environment, Zobel remained confident that Ayala will benefit substantially from the strong competitive positions of its core businesses. "We believe that we are in a strong financial and competitive position. Our core business remain sound and profitable and the initiatives we are undertaking at the holding company level will enhance our ability to create and realize value for all our shareholders over the medium term," he said.