MANILA, Philippines - Profits of Ayala Corp. (AC), the country’s oldest conglomerate, said yesterday its income was buoyed by gains from an asset sale and better income contribution from the real estate, telecom, water and international businesses in the first quarter.
In a regulatory filing, AC reported that its net income climbed 22 percent to P5.5 billion in the first quarter. The improved performance of the business units contri-buted a total P6.9 billion in equity earnings to AC, up 20 percent from a year ago.
“We are glad to see the strong momentum continue across our core businesses as well as the improving profitability of our international businesses,†said AC president and chief operating officer Fernando Zobel de Ayala.
“We are confident this momentum will continue for the rest of the year as the fundamental drivers of domestic economy remain firmly in place. This will continue to underpin demand for our real estate products, banking, telecom and water services,†he added.
AC said the uptick in first quarter earnings was driven by the real estate, telecommunications, water and international businesses. It also benefited from a P1.8-billion capital gain from the sale of Stream Global Services Inc., one of its investee companies under its business process outsourcing unit.
The asset sale and higher income from several business units allowed AC to offset the decline in the earnings contribution of Bank of the Philippine Islands (BPI) which was hit by the absence of trading gains.
“Excluding the capital gains during the period and the impact of BPI’s unusually high trading gains of P5.7 billion and Globe’s accelerated depreciation last year, AC’s net income would be up 24 percent year-on-year,†the conglomerate said.
Most of AC’s core businesses reported double-digit earnings growth in the first quarter.
Real estate arm Ayala Land Inc. recorded a 25-percent growth in net income to P3.5 billion due to higher revenues across its residential, commercial leasing and property services, combined with stable margins overall.
Globe Telecom said its net income surged more than four times to P2.9 billion from only P686 million a year ago, largely due to healthy topline growth and the tapering of accelerated depreciation charges following its network modernization program.
Net income of utility firm Manila Water Co. Inc. rose nine percent to P1.4 billion on the back of the the growth in billed volume mainly from new business areas in Laguna, Boracay, Clark and Vietnam.
But earnings of BPI sank 57 percent to P3.6 billion in the absence of significant gains from trading securities. Its core banking business remained strong as net interest income grew 15 percent year-on-year.
Ayala’s international businesses registered continued improvement in earnings. Integrated Microelectronics Inc. said its net income jumped 20 times to P226 million on higher sales volumes, better cost savings and improved margins.
AC is also ramping up investments in new businesses. It allotted P49 billion in capital expenditure for BPI’s stock rights offering, ongoing power projects and the transport infrastructure projects.
The conglomerate also ventured into the education sector with the upcoming opening of nearly a dozen new high schools for secondary education under the Affordable Private Education Center.