Major units pump up Ayala Group’s profit

MANILA, Philippines - Ayala Corp. reported a 19-percent rise in profit in the first nine months to P8.7 billion, mainly driven by the robust performances of its property, banking and water units.

In a statement issued yesterday, Ayala said core net income, which excludes the impact of the accelerated depreciation from its telecom unit and revaluation gains realized at its international property unit last year, grew 31 percent to P9.3 billion.

Equity earnings from core and non-core businesses amounted to P11.1 billion, up 21-percent year on year as significant improvement in the conglomerate’s international businesses also helped boost equity earnings.

With the strong earnings momentum over the past quarters, Ayala’s share price gained 49-percent year-to-date, outpacing the market’s 28-percent increase.

Share prices of other listed subsidiaries have likewise increased substantially over the period as they consistently delivered a solid earnings trajectory.

Jaime Augusto Zobel de Ayala, chairman and chief executive officer of Ayala, said the combined performance of each of the group’s core businesses “keeps us on track with our year-end targets,” adding that “the positive momentum in the domestic economy continues to present opportunities for us to build on the trajectory of our core businesses and aggressively expand in these sectors.”

“As our core businesses remain a steady source of earnings and cash flow, we also continue to optimize our portfolio to maximize value and actively invest in new sectors such as power and transport infrastructure to build a platform for long-term growth,” Zobel said.

Property unit Ayala Land posted net earnings of P6.6 billion, an increase of 27 percent on strong revenues across all product lines. Total revenues rose 20 percent to P39 billion with its property development business up 27 percent on higher bookings and continued completion of projects. The commercial leasing business likewise expanded 19 percent to P6.3 billion with contribution from new malls, higher occupied office gross leasable area, and higher lease rates.

Net income of financial services arm Bank of the Philippine Islands jumped 37 percent to P13.2 billion, driven by an 18- percent growth in revenues as net interest income rose eight percent. The lender’s improved performance translated to a return on equity of 19.2 percent.

Weighed down by higher expenses and impact of the accelerated depreciation from its network modernization program, Globe Telecom’s profit fell 15 percent to P6.8 billion. Top-line growth, however, remained strong with service revenues hitting a record P61.3 billion or six percent higher year on year.

Manila Water, meanwhile, chalked up a net income of P3.9 billion, up 26 percent on the back of a 22-percent hike in revenues as a result of the steady rise in billed volume plus the timely implementation of the tariff adjustment and the contribution of new businesses outside the East Zone concession area.

Its electronics business, Integrated Microelectronics Inc. recorded a three-fold rise in earnings to $5 million as revenues went up 18 percent despite the weakness in developed economies as well as a slowdown in China.

BPO unit LiveIt trimmed its net loss as revenues climbed eight percent to $251 million. EBITDA grew 41 percent to $22 million due to improved profitability at Stream, Integreon and Affinity Express.