Ayala Corp Q3 income rises 7%

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By Denise A. Valdez, Reporter

AYALA CORP. (AC) saw a 7% increase in its earnings in the third quarter, driven by the sustained contributions of its banking and power units.

AC said in a statement yesterday its net profit in the July to September period stood at P8.3 billion, bringing the nine-month attributable net income to P46.16 billion, almost double from P23.86 billion last year.

Consolidated revenues in the nine months climbed 4% to P232.88 billion, following the 4% increase in total costs to P171.85 billion.

By business segment, Ayala Land, Inc. contributed the biggest chunk of revenues at P23.2 billion, 12% higher from last year. The growth was driven by higher revenues from its office segment (up 51%), commercial and industrial lot sales (up 16%), and commercial leasing revenues (up 16%) during the period. This helped offset the 2% drop in property development revenues to P85.4 billion due to a decline in contributions from high-end and upscale residential projects.

The company’s power business, under AC Energy, Inc., reported a P24.3-billion profit at the end of the nine months, from P2.8 billion last year, “lifted by the recovery of costs incurred from adjustments in the construction and operations of its power plants and gains from the partial divestment of its thermal assets.”

AC Energy also started recording earnings from its new solar projects in Vietnam, which opened new revenue streams since the second quarter. Its bigger stake in South Luzon Thermal Energy Corp. from acquiring PHINMA Energy Corp. likewise helped drive earnings growth.

Meanwhile, Bank of the Philippine Islands (BPI) contributed P22 billion to total revenues, 30% higher year-on-year. BPI revenues jumped 25% to P71 billion during the nine months as its net interest income grew 20% to P48.7 billion.

Globe Telecom, Inc. likewise expanded its net income 20% to P17.7 billion during the nine-month period. The heavy demand for its data-related services and the increase in its number of subscribers helped lift the company’s profits in January to September. Mobile data revenues stood at P52.2 billion (up 44%), home broadband revenues at P16.1 billion (up 19%), and corporate data revenues at P9.5 billion (up 12%).

Manila Water Co., Inc., on the other hand, saw its bottom line affected by the water supply crisis hounding Metro Manila. Its net income fell 11% to P4.4 billion as profits from its Manila concession dropped 17% to P4 billion.

Manila Water’s domestic subsidiary, Manila Water Philippine Ventures, reported its revenues more than doubled to P301 million. Operations of Laguna Water, Boracay Water and Estate Water also helped in boost the company’s top line 10% to P16 billion.

AC Industrial Technology Holdings, Inc. posted a net loss of P1.6 billion during the nine-month period, dragged by the weak performance seen across its business segments. The net profit of Integrated Micro-Electronics, Inc. was halved to $451,000 as a global slowdown in the automotive sector weighed on its performance.

AC Motors, which handles AC Industrials’ vehicle distribution and retail businesses, slumped to a net loss of P262 million during the period due to lower sales of Honda, Isuzu and Volkswagen cars. Investments in start-ups Merlin Solar and MT Technologies also reported higher losses during the period, but AC did not provide details.

AC was able to spend P15.1 billion in the nine months, representing 67% of its total capital expenditure allocation for 2019. This went primarily to the company’s investments in power, industrial technology and infrastructure.

Meanwhile, the company said in a separate statement yesterday its health care unit Ayala Healthcare Holdings, Inc. (AC Health) is taking a minority stake in a pharmaceutical product importer and its affiliated distribution company.

AC Health said it signed an agreement with I.E. Medica, Inc. and MedEthix, Inc. yesterday to improve its vertical integration as a health care business. The companies are primarily involved in importing and distributing medicines.

“Our investment into IE Medica and MedEthix fits well with AC Health’s overall vision to improve health care. The Salians (company owners) have built an impressive platform, and we are happy they share in our vision to bring quality, affordable medicines to more Filipinos,” AC Health Chairman Fernando Zobel de Ayala was quoted as saying.

AC Health currently has a network of more than 800 Generika pharmacies and 70 FamilyDOC primary care clinics.

Shares in AC fell 16 points or 1.87% to P840 each at the stock exchange on Tuesday.