San Miguel, Ayala report healthy net income in Q1

MANILA, Philippines – Listed conglomerates San Miguel Corporation (SMC) and Ayala Corporation saw their net income jump during the first quarter of 2016, riding on the strong performance of their core businesses.

Food-to-power conglomerate SMC said its net income surged 122% in the first 3 months of 2016 to P13.53 billion ($630.76 million) from P6.01 billion ($280.18 million) posted in the same period in 2015.

The conglomerate’s beer and food manufacturing units posted double-digit growth in net income. San Miguel Brewery Incorporated posted a 23% increase to P4 billion ($186.47 million) in its first quarter net income, while San Miguel Pure Foods Company, Incorporated, booked P1.21 billion ($56.41 million) net income, up 34% from the same period a year ago.

Ginebra San Miguel Incorporated registered a P54 million ($2.52 million) net income for the first quarter of the year, a reversal from the P29 million ($1.35 million) net loss posted a year ago.

The group’s infrastructure unit booked net sales of P4.69 billion ($218.64 million), 16% higher from the level a year ago due to high traffic volume in the South Luzon Expressway, Tarlac-Pangasinan-La Union Expressway, STAR Tollway, as well as Skyway Stage 1 and 2.

San Miguel Global Holdings Corporation, the company’s power generation unit, reported a 1% increase in net sales to P19.93 billion ($929.10 million).

Ayala and its core’s growth

Meanwhile, Ayala recorded a net income of P5.8 billion ($270.38 million) in the first quarter of 2016, growing 15% from a year ago, as most of its businesses performed well. The largest growth came from its real estate, power generation, and automotive businesses.

The conglomerate said the first quarter results were driven by the equity earnings contribution from business units, which reached P7.2 billion ($335.65 million), 11% higher year-on-year. 

Ayala Land and Manila Water posted double-digit growth in equity earnings contribution, up 16% and 13%, respectively.

At the same time, Ayala Automotive rebounded in the first 3 months of 2016 with equity earnings contribution expanding fivefold on the back of strong sales in the Isuzu and Honda brands as its Volkswagen sales started to ramp up.

The group’s recent venture into power and transport also provided additional boost to the group’s positive first quarter performance.

AC Energy also sustained its positive earnings trajectory, generating a net income of P250 million ($11.65 million) in the first quarter as its power projects achieved more efficient operating levels.

AC Energy currently has approximately 650 megawatts in attributable capacity across its conventional and renewable investments.

In transport, AC Infrastructure recorded net earnings of P23 million ($1.07 million) following the systems takeover of Light Rail Transit Line 1 (LRT1) in September 2015.

AC Infrastructure currently has 3 public-private partnership projects in its portfolio – the 4-kilometer Muntinlupa-Cavite Expressway, the Beep ticketing system, and the extension, operations, and maintenance of the LRT1.

“As we conclude our medium-term plan this year and embark on a new 5-year growth strategy, we are encouraged by the upbeat first quarter results of our businesses. We believe the Philippines continues to be fundamentally strong, and we expect most of our businesses to continue growing at a healthy pace,” Ayala president and COO Fernando Zobel de Ayala said. – Rappler.com

$1 = P46.62