Ayala Corp reports 22% increase in Q1 income

MANILA, Philippines – The first quarter earnings of conglomerate Ayala Corporation grew by 22% to P5.5 billion compared to the same period in 2013, driven by its real estate, telecommunications, water and international businesses.

In a statement, Ayala Corp. also credited its first quarter performance to a P1.8-billion capital gain from the sale of Stream Global Services Incorporate, one of its investee companies under its business process outsourcing unit.

Ayala Corp. president and chief operating officer Fernando Zobel de Ayala expressed confidence that the growth “momentum” will be sustained for the rest of 2014.

“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 said.

He also cited the continuing “strong momentum…across our core businesses as well as the improving profitability of our international businesses.” 

The strong performance of the business units and the capital gain offset the decline in the earnings of its banking unit, Bank of the Philippine Islands (BPI), which reported lower earnings in the first quarter due to absence of trading gains compared to the first quarter of 2013.

Most of Ayala Corp’s core businesses reported double-digit earnings growth year-on-year in the first quarter, such as Ayala Land, its real estate unit, which reported a 25% growth in net income to P3.5 billion on revenues across its residential, commercial leasing, and property services. 

Its telecom unit, Globe Telecom, reported a 4-fold increase in net income to P2.9 billion from only P686 million in the same period last year.

Manila Water Company Incorporated’s net income rose by 9% to P1.4 billion. Revenues continued to grow as a result of higher billed volume, mainly from new business areas in Laguna, Boracay, and Clark, and in Vietnam.

BPI’s earnings declined by 57% to P3.6 billion as the previous year’s results included significant gains from trading securities. 

Ayala Corp’s core banking business, however, remained strong as net interest income grew by 15% year-on-year, and non-interest income, excluding trading gains, rose by 16% during the period.

Ayala Corp. also announced continued investments in new businesses.

For this year, the holding company has allotted P49 billion in capital expenditure mainly for its investment in BPI with its participation in the stock rights offering, on-going power projects including the closing of its acquisition of its stake in GN Power Mariveles, and transport infrastructure projects.

Progress in its entry in the education sector include the scheduled opening of nearly a dozen new high schools for secondary education under the Affordable Private Education Center or APEC schools in Quezon City, Caloocan, Marikina, Pasig and Manila.

As of end-March 2014, parent company cash reached nearly P30 billion, putting net debt-to-equity ratio at 0.43 to 1.

Earlier this month, Ayala Corp. successfully completed a US$300-million Exchangeable Bond issue which was 2.5 times oversubscribed. – Rappler.com