Ayala Corp posts single-digit net income growth in 2018

Ralf Rivas
Ayala Corp posts single-digit net income growth in 2018
Ayala Land, Globe Telecom, and AC Energy boost parent company Ayala Corporation's net income to P31.8 billion, up by 5% in 2018

MANILA, Philippines – Ayala Corporation‘s net income grew by 5% to P31.8 billion in 2018, boosted by strong earnings from its real estate, telecommunications, and power businesses.

Ayala Land, Globe Telecom, and AC Energy registered double-digit growth.

However, the country’s oldest conglomerate incurred higher borrowing costs for its investments, moderating its net profits for the year.

The net income growth for 2018 was much lower than the 16% growth in 2017.

“Over the past 10 years, we spent close to P200 billion in capital expenditure at the parent level alone to support the investment programs of our various business units, including our new growth platforms in power, industrial technologies, infrastructure, education, and healthcare. Our profitability has also improved steadily over the past 10 years, growing at a compounded annual rate of 15%,” Ayala president and chief operating officer Fernando Zobel de Ayala said.

At the parent level, Ayala spent P43.7 billion in capital expenditure in 2018, largely to support the stock rights offerings of the Bank of the Philippine Islands (BPI) and Integrated Micro-Electronics Incorporated (IMI) as well as to fund the expansion of its emerging businesses. 

For 2019, parent level capital spending is programmed at P22.6 billion to boost AC Energy, AC Infra, and AC Health.

The Ayala group is maintaining its capital spending level and has earmarked P262 billion in combined capital expenditure for 2019.

A bulk of this amount is allocated to Ayala Land and Globe, which have set aside P130 billion and P63 billion in capital expenditure for the year, respectively.

Real estate

Ayala Land‘s net income grew by 16% to P29.2 billion, driven by property development and commercial leasing.

Property development revenues grew by 18%, while residential revenues climbed by 20%. 

Meanwhile, fresh bookings from its new properties lifted the sale of office spaces, with revenues reaching P11.4 billion, 14% higher than in 2017.

In 2018, Ayala Land added 142,000 square meters (sqm) of mall space with the opening of 3 new malls – the Circuit Mall in Makati City, the Capitol Central Mall in Bacolod City, and One Bonifacio High Street in Taguig City – bringing its total mall gross leasable area (GLA) to 1.9 million sqm.

Moreover, the completion of Bacolod Capitol Corporate Center, Vertis North Corporate Center 3, and Ayala North Exchange pushed up Ayala Land’s total office GLA to 1.1 million sqm.


Globe Telecom raked in P18.4 billion in 2018, 22% higher compared to 2017 due to higher mobile data use and more households installing broadband services.

Service revenues reached P132.9 billion, while mobile revenues grew 9% to P106.9 billion, driven by mobile data services.  

Meanwhile, its home broadband business jumped 19% to P18.5 billion on continued subscriber expansion in fixed wireless solutions, specifically the Home Prepaid Wi-Fi product. 

Globe spent P43.3 billion in capital expenditure in 2018, equivalent to 32% of its service revenues.


AC Energy’s net earnings grew by 16% to P4.1 billion, driven by its domestic and thermal renewable assets and higher contribution from its investments in Indonesia.

The company attributed its strong performance in 2018 to higher equity stake in GNPower Mariveles, strong wind regime, and fresh contribution of its greenfield offshore project, the 75-megawatt Sidrap wind farm in Indonesia, as well as the full-year recognition of SD Geothermal.

Equity earnings from AC Energy’s investee companies reached P3.6 billion, 37% higher than in 2017. Recovery of the costs incurred due to adjustments in the construction schedule of GNPower Kauswagan also lifted AC Energy’s net earnings during the period.

Other businesses

BPI reported a net income of P23.1 billion, up by 3% from 2017, due to the robust growth of its core banking business.

Manila Water recorded a net income of P6.5 billion, 6% higher than in 2017, largely driven by the Manila Concession and boosted by its newly acquired platforms in Thailand and Indonesia.

AC Industrials’ net income dropped 53% year-on-year to P578 million, largely due to the weaker performance of its automotive businesses and startup losses from new businesses. 

Meanwhile, IMI reported a net income of P2.4 billion, up by 34% due to non-operating items.

AC Motors registered a 76% decline in net earnings to P164 million, due to significantly lower earnings of the group’s Honda and Isuzu dealerships. – Rappler.com

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.