AYALA CORP. (AC) posted an 11% increase in earnings in 2019, lifted by gains from divesting in its education and energy businesses and higher consumer demand from its property, telecommunications and banking segments.
In a statement yesterday, the conglomerate said its attributable net income last year rose to P35.28 billion, as revenues climbed 4% to P295.26 billion. Costs and expenses stood at P222.10 billion, 3% up from a year ago.
The bulk of its profits came from its property segment, through Ayala Land, Inc. (ALI), which recorded a net income increase of 13% to P33.20 billion. This was driven by the growth of sales from office lots (up 12%) and commercial and industrial lots (up 46%), along with 33% higher revenues from commercial leasing to P39.30 billion.
The banking segment, operated by Bank of the Philippine Islands (BPI), added P28.80 billion in net profits to jump 25%. The rise was due to an 18% increase in net interest income to P65.90 billion, a 9% loan growth to P1.48 trillion, 7% growth in deposits to P1.70 trillion and a 25% rise in fee-based and securities trading income to P28.40 billion.
Globe Telecom, Inc., which operates AC’s telecommunications business, had a net income of P22.30 billion, rising 20% year on year. Higher demand for data-related products and services lifted service revenues last year by 12% to P149 billion.
Power unit AC Energy, Inc. added P24.60 billion in net earnings, fueled by returns from its solar projects in Vietnam, tamer costs from tweaking operations in power plants, and gains from divesting some of its thermal assets.
Water business Manila Water Co., Inc. saw a 16% decline in profits to P5.50 billion, mainly due to the shortage of water supply last March. The company also waived bills in April due to the drop in water availability at the La Mesa dam. Costs and expenses last year for Metro Manila’s east zone concession jumped 32% to P6.40 billion.
Posting a net loss was AC Industrials, which handles AC’s electronics manufacturing and automotive business. Its losses stood at P2.40 billion primarily due to a global, industry-wide decline in the electronics manufacturing services and global auto industries business. Under AC Industrials are Integrated Micro-Electronics, Inc. and AC Motors, which both saw a net loss of $7.80 million and P337 million, respectively.
“The events of the past year have challenged the stability of our corporate momentum over the last decade. However, Ayala has proven its resilience across multiple business cycles over the 186 years that we have been in operation,” AC Chairman and Chief Executive Officer Jaime Augusto Zobel de Ayala said in the statement.
“Notwithstanding the challenges faced by our water and global manufacturing businesses in the past year, our real estate, banking, telco, and power units continue to serve as engines of growth. This validates the strength of a diversified portfolio and the expansion strategy we put in place a decade ago,” AC President and Chief Operating Officer Fernando Zobel de Ayala added.
AC spent P215 billion for capital investments last year, of which P109 billion went to ALI and P51 billion to Globe. Some P30 billion were parent-only capital expenditures, which are investments in the company’s newer businesses.
Shares in AC at the stock exchange lost P40.50 or 6.32% to close P600 apiece on Thursday. — Denise A. Valdez