In addition to the contribution of its key businesses, Ayala also generated P2.02 billion in capital gains so far this year, although the company noted that most of these were registered in the first six months of 2002 when the equity markets were more buoyant.
Benefitting from a significant improvement in its cost structure, Ayala managed to pare down its debt to P46.7 billion from P61.1 billion a year ago, resulting in lower interest and financing charges by 28 percent.
As of end-September this year, Ayala had a consolidated debt-to-equity ratio of 0.91:1 as against 1.27:1 in the same period last year.
Management said the company’s debt reduction and refinancing program is going well and that Ayala continues to receive attractive proposals for credit facilities from several financial institutions.
"Taking advantage of these facilities will allow the company to maintain a lower level of cash on its balance sheet, lower its interest costs and improve its debt maturity profile even further," Ayala said in a statement issued yesterday.
Ayala stressed that all its maturing obligations for next year can be comfortably covered with existing cash and committed credit facilities already in place.
As for its real estate subsidiary, Ayala Land Inc. posted a four-percent increase in its net income during the nine-month period ending September this year to P1.62 billion from only P1.5 billion the previous level.
In telecommunications, Globe Telecom registered a net income of P4.3 billion for the first three quarters of the year on a record P33.2 billion in net revenues. Wireless subscriber growth remained robust and increased by 524,000 in the third quarter, reaching the six-million-mark by the end of the quarter.
For the third quarter alone, profits of Globe Telecom amounted to P1.3 billion even after taking a P2.2 billion asset write-off related to the operational integration of the Globe and Islacom wireless networks.
The integration project is expected to result in P1.5 billion in capital expenditure savings as well as P600 million in annual operating expenditures.
In banking, the Bank of the Philippine Islands posted a P4 billion net income for the first nine months of the year, down by 13 percent from last year due to the overall decline in the interest rate level and the consequent narrowing of interest rate spreads.
In assessing the company’s performance, Ayala president and chief executive officer Jaime Augusto Zobel de Ayala II said: "In the difficult environment we face, I am pleased that our key subsidiaries and affiliates have retained their positions of leadership and delivered solid results, especially given the different circumstances of their respective industries."
Zobel, however, said that even with the excellent results from Ayala’s telecommnications business, the holding company may not be able to sustain the earnings momentum generated in the first half due to the continued weakness in the property and banking sectors.
He expressed confidence that should general economic conditions improve, Ayala’s businesses will likely benefit significantly due to their dominant competitive positions.
In the meantime, with the likely volatility arising from the country’s fiscal position, maintaining Ayala’s strong credit standing and financial health will continue to be the company’s primary focus.
Zobel said Ayala "will continue to strengthen its balance sheet and maximize the available opportunities to reduce or refinance its debt in accordance with its medium-term plan."