Ayala Corp’s 9-month income soars 48% to P5.1B

Conglomerate Ayala Corp. chalked in a net income of P5.1 billion in the period nine-month to September this year, up 48 percent from the year-ago level, mainly driven by the strong performance of its real estate, banking and water disribution units which offset lower equity earnings from its telecommunications business.

The company said value realized from the sale of its shares in Ayala Land and Manila Water also helped sustain its income growth momentum.

"We are pleased with the performance of our key businesses in the first nine months and are optimistic that the recent positive signals in the broader economy will continue to underpin our long-term growth prospects as well as create an environment that will lead to sustained economic recovery," Ayala Corp. president and chief executive officer Jaime Augusto Zobel de Ayala said.

Property subsidiary Ayala Land Inc. (ALI) reported a net profit of P2.6 billion, 46 percent higher than the previous level as consolidated revenues, on the other hand, went up 35 percent P16.5 billion.

Revenues from shopping center operations rose 23 percent with higher gross leasable area and higher rental fees. Revenues from high-end residential lot and middle-income development increased 14 percent and 80 percent, respectively, while revenues from construction and property management services grew 41 percent and 11 percent, respectively. Earnings were also enhanced by gains from the sale of ALI’s stake in the MRT-3 project in the first quarter of the year.

Bank of the Philippine Islands posted a net income of P6.3 billion in the first nine months, up 20 percent. Revenues increased 23 percent on higher net interest and non-interest income while net interest income went up 22 percent with a 13-percent expansion in the bank’s asset base.

Growth in non-interest income was driven by gains from asset sales and the robust performance of the insurance, asset management and trust businesses. But the growth in BPI’s net income was tempered by the increase in provision for losses to P2.1 billion from P900 million last year, due to P630- million probable losses set up by recently acquired Prudential Bank and potential adjustments under the new international accounting standards regulations.

With the consolidation of Prudential Bank, BPI‚s total resources as of end-September reached P521 billion while gross loans grew seven percent year-to-date to P232 billion. Following the full integration of Prudential Bank, the bank’s NPL (non-performing loans) ratio increased to 7.8 percent from 5.6 percent at year-end 2005 but still lower than the industry average of 9.5 percent as of end-July.

Globe Telecom’s consolidated net income in the first nine months fell 28 percent to P6.4 billion, largely due to higher marketing and network-related expenses and the full impact of higher corporate taxes following the expiration of its tax holiday last March.

Globe’s consolidated service revenues reached P40.3 billion, up three percent with a higher take up of lower-revenue generating subscribers and intensified price competition.

As of end-September this year, Globe’s total wireless subscriber base grew to 12.4 million, up nearly six percent from last year.

Companies under AC Capital contributed significantly to the group with equity earnings collectively up 30 percent against last year. This was underpinned by the strong performance of Manila Water and semi-conductor maker Integrated Microelectronics.

Profits of Manila Water surged 46 percent to P1.5 billion. Continued improvements in operating efficiency with the further reduction of non-revenue water (NRW) and consistent increases in billed volume pushed revenues 33 percent higher to P4.1 billion. NRW reached an all-time low of 35.6 percent in September, surpassing earlier targets while average billed volume grew by eight percent year-on-year with the expansion to new areas in the metropolis, particularly Taguig, Antipolo and Rizal.

Electronics subsidiary Integrated Microelectronics Inc. posted a nine-month net income of P931 million, seven percent higher than the P871 million earned during the same period last year. Revenues grew 58 percent, driven by higher volumes from key customers and higher turnkey business. Its merger agreement with Singapore-based Speedy-Tech Electronics Ltd. was recently approved by Speedy Tech shareholders and sanctioned by the Singapore High Court. IMI is expecting to conclude the transaction by December 2005.

Ayala Corp. ended the first three quarters of the year with a stronger balance sheet. Net debt at the parent level stood at $556 million as of end-September from $642 million at end-2004. Additionally, Ayala Corp. has improved its peso to dollar loan balance to 58 percent to 42 percent following the issuance of a five-year, P3-billion fixed rate note last August and a seven-year P4.2-billion fixed rate loan in September.