Ayala Group sets aside P264 billion for 2023 capex

MANILA, Philippines — The Ayala Group is allocating P264 billion in capital expenditures for this year, of which P19.4 billion will come from parent Ayala Corp. to fund investment opportunities.

This year’s capex is lower than the P280.3 billion last year, which was relatively bigger with a 24-percent increase from the year before mainly due to investments made by Ayala Land Inc., Globe Telecom and ACEN.

Ayala Corp.’s core net income grew by 18 percent to P27.7 billion last year from a year ago, mainly due to higher contributions from banking arm BPI and property business Ayala Land Inc.

However, Ayala’s reported net income was flat at P27.4 billion last year. This includes significant one-off items such as gains from BPI’s sale of a property, Globe’s partial sale of its data center business and a portion of its towers, ACEN’s accelerated acquisition of UPC Australia, AC Energy’s write-off from the sale of a coal asset, and AC Venture’s impairment provisions on the investment in Yoma.

Ayala president and CEO Cezar Consing said the full year results demonstrate the strength and diversification of the company’s portfolio.

He sees the economy getting back on its feet this year.

“If 2022 was marked by revenge spending on the part of consumers, 2023 may well see the resurgence of the economy as a whole. With strengthening macro, our businesses should get back to or exceed pre-pandemic levels in 2023,” Consing said.

By business segment, BPI, the banking arm, reported a net income of P39.6 billion, up 66 percent year-on-year on the back of higher interest and non-interest income, lower provisions, and the gain from a property sale.

Ayala Land, for its part, reported a net income of P18.6 billion, up 52 percent year-on-year due to stronger commercial lot sales and the doubling of its revenues from commercial leasing and hotels and resorts.

Similarly, telco giant Globe grew its net income by 46 percent year-on-year to P34.6 billion mainly from higher data service revenues and gains from the partial sale of its data center business and a portion of its tower assets.

ACEN’s net income more than doubled year-on-year to P13.1 billion mainly due to a revaluation gain from its accelerated acquisition of UPC Australia, supported by contributions from new domestic and international plants.

On the other hand, ACEN’s parent company, AC Energy, saw its net income decline by 50 percent to P4.6 billion mainly due to one-offs from the divestment of two coal assets: a write-down from the divestment of SLTEC in 2022 and a gain from the divestment of GN Power Kauswagan in 2021.

Isolating the effect of these significant one-offs, AC Energy’s core net income was down by four percent year-on-year.

As for Ayala’s relatively new businesses, AC Health achieved profitability, booking P229 million in net income on improving operations.

AC Logistics, on the other hand, continued to focus on growing its businesses beyond the last mile and integrating the assets of Entrego and AHI to improve efficiencies and customer experience.