Ayala hikes capex to P262B for this year

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By Arra B. Francia, Reporter

AYALA CORP. (AC) is ramping up its spending to P262 billion in 2019 to further support the expansion of its property and telco businesses, while also growing its energy, infra, and health units.

In a statement issued Wednesday, the listed conglomerate said bulk of the group’s capex will go to Ayala Land, Inc. (ALI) and Globe Telecom, Inc., which have committed to spend P130 billion and P63 billion, respectively.

At the parent level, AC has programmed to spend P22.6 billion split among AC Energy Holdings, Inc., AC Infrastructure Holdings Corp., and AC Healthcare Holdings, Inc.

This year’s capex is five percent higher than the P249 billion that AC allotted in 2018.

“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,” AC President and Chief Operating Officer Fernando Zobel de Ayala said in a statement.

AC also disclosed on Wednesday that net income attributable to the parent grew five percent to P31.8 billion in 2018, driven by higher equity contributions from ALI, Globe, and AC Energy. Revenues for the group also went up 13% to P274.88 billion.

The company noted that equity contributions from its business units reached P39.4 billion, 10% higher year on year, but the bottomline growth was tempered by elevated borrowing costs due to more investments during the period.

“Our profitability has also improved steadily over the past 10 years, growing at a compounded annual rate of 15 percent,” Mr. Zobel said.

ALI saw its net income rise by 16% to P29.2 billion, thanks to the strong performance of its property development and commercial leasing businesses. Consolidated revenues also surged 17% to P166.25 billion.

The listed property developer benefited from the sale of office spaces in its projects in Vertis North in Quezon City, Circuit Makati, and Bonifacio Global City. The opening of new malls, office spaces, and new hotel and resort rooms further improved its commercial leasing revenues.

Meanwhile, Bank of the Philippine Islands’ net income rose 3% to P23.1 billion, on the back of an 11% increase in total revenues to P78.5 billion. Total deposits with the listed lender grew by 1.5% to P1.59 trillion for the year, while total loans went up by 13% to P1.35 trillion.

For its telecommunications business, Globe reported a 22% increase in net income to P18.48 billion. Service revenues climbed 10% to P140.23 billion, bulk of which came from data-related services as the company grew its customers by eight percent to 37 million.

The listed telco player said it continues to build up its network capacities to accommodate the traffic data growth and customer base.

East zone concessionaire Manila Water Services, Inc increased its net income by 6% to P6.5 billion, primarily due to its Metro Manila east zone concession coupled by its new acquisitions in Thailand and Indonesia.

The energy unit increased net earnings by 16% to P4.1 billion, as it continued to expand its renewable energy assets.

AC Industrials, meanwhile, posted a 53% drop in earnings to P578 million, pulled down by its auto unit’s weak performance in addition to start-up losses from newly acquired businesses.

Shares in AC fell 0.54% or P5 to close at P920 each at the stock exchange on Wednesday.