Ayala Corp 2011 profit drops 16%

Conglomerate Ayala Corp. reported a 16% drop in net income from 2011 to 2010, which it attributed to an extraordinary net gain in 2010

MANILA, Philippines – Despite record financial performances of Ayala Corp.’s key business units, overall net income for the country’s oldest conglomerate dropped 16% in 2011 to P9.4 billion.

In a statement to the Securities & Exchange Commission on Friday, March 9, the drop was attributed to an extraordinary net gain of P3.6 billion in 2010 when profits hit P11.2 billion. 

The company pointed out that most of its core businesses posted record earnings in 2011 and, when excluding the extraordinary gains, Ayala Corp. saw a 16% gain in net income year-on-year. 

The graph below shows how the key business units performed in 2011.

Bank of the Philippine Islands remained the main contributor the conglomerate’s bottomline.

In 2011, the conglomerate’s banking unit realized a 13% surge in earnings, hitting an all-time high net income of P12.8 billion by the end of 2011.

Telecommunications unit Globe realized a 11% jump in net income, even as rival Philipppine Long Distance Telephone Co. (PLDT) gobbled up Digital Telecommunications (Digitel) in October 2011.

Globe, now a far second player in the local telco industry, posted an income growth vis-a-vis PLDT and Digitel’s consolidated financial performance that reflected a net profit slump 21% in 2011.

Meantime, real estate unit Ayala Land Inc., performed well with a record P7.1 bilion net income, a 31% year-on-year growth.

The group had been been open about their interest to participate in the Aquino government’s public-private partnership (PPP) push for infrastructure projects. An Ayala Land unit has won the bidding for the Daang Hari road, the 1st PPP project that the Aquino government auctioned off, giving the group confidence in vying for more.

These infrastructure projects are expected to complement and support the planned growth of the real estate businesses of the Ayala group.

On the other hand, water services provider Manila Water Co. Inc. posted a 7% increase in net income, realizing an all-time high of of P4.3 billion in 2011 as more houses were connected into the system, increasing billing volume. 

Manila Water has recently bagged several contracts here and abroad, including the privatization of Cebu water services

“We are pleased with the solid performance of our core businesses in real estate, banking telecom and water,” said Ayala President and COO Fernando Zobel de Ayala. “We expect the growth trajectory of our businesses to continue as we agressively expand our products and services,” he added.

The Ayala group will shell out P91 billion for capital expenditures in 2012, a 38% increase from 2011.

The lion’s share will be spent on real estate development, network improvement for its telecom unit, acquisitions and investments in its water business. – Rappler.com