By Arra Francia, Reporter
THE real estate and power units of Ayala Corp. (AC) boosted its earnings for the first quarter of 2018, with net income attributable to the parent up 10% year-on-year.
In a statement issued Friday, the listed conglomerate reported an attributable profit of P7.7 billion from January to March, higher than the P6.93 billion posted at the same time last year.
AC generated P70.29 billion worth of revenues, a 17% improvement from the same period in 2017.
“The sustained growth momentum in our portfolio reflects the progress we have made in our long-term diversification strategy to establish new pillars of growth and expand into new markets,” AC President and Chief Operating Officer Fernando Zobel de Ayala said in a statement.
AC has core interests in property development, banking, telecom, water, power, and manufacturing and automotives.
One of the country’s oldest conglomerates, it got a boost from Ayala Land, Inc. (ALI), which grew its revenues by 17% to P36.98 billion following new bookings and project completions. This helped net income grow by 17% to P6.5 billion for the quarter.
Residential projects continued to be the largest contributor to revenues at P25.14 billion, while the commercial leasing segment provided P8.16 billion.
ALI launched P10.9 billion worth of projects for the quarter, while spending P26.7 billion in capital expenditures out of its full year budget of P111 billion.
Bank of the Philippine Islands (BPI) delivered flat earnings for the period at P6.2 billion, on the back of a 3% increase in revenues to P18.5 billion. AC said lower interest income dragged down BPI’s earnings amid the positive performance of its core banking business.
Globe Telecom, Inc. saw an 8% uptick in revenues to P33.6 billion, driven by mobile, home broadband, and corporate data segments. Profit accordingly rose by 20% to P4.5 billion for the quarter.
The telecom giant spent P6.6 billion in capital expenditures from January to March to meet the demands of a growing subscriber base and data use.
Globe also said it has initiated discussions with third party groups for the possibility of establishing a tower company to help speed up the building and deployment of cellular towers in the Philippines. Officials from the company earlier said it is open to teaming up with rival PLDT, Inc. for the venture.
AC’s water business through Manila Water Co., Inc. delivered a 17% increase in net income to P1.69 billion, citing the improved performance of the Manila Concession and domestic business units alongside lower depreciation expense.
Manila Water’s revenues went up 8% to P4.7 billion for the period. AC noted that its foreign investments have started to pick up, with contribution to earnings expanding by 26% to P109 million.
AC’s investments in Indonesia, and thermal and renewable platforms lifted its power unit, nearly doubling net profits to P593 million for the quarter. AC Energy currently has a total attributable capacity of around 1,600 megawatts from thermal and renewable plants, both operating and under construction.
Meanwhile, AC Industrials booked a 36% drop in net income for the period, pulled down by one-off expenses and start-up costs of new acquisitions despite topline growth.
Integrated Micro-Electronics, Inc., for instance, wrote off $3 million for employee relocation incentives for the transfer of one of its operations in China. This tempered a 38% increase in revenues to $325.8 million, with net income ending 36% lower at $5.6 million.
AC Automotive meanwhile had 11% growth in net income to P129 million, following high unit sales of the Volkswagen and KTM brands.
Shares in AC jumped 3.47% or P32.50 to close at P970 each at the Philippine Stock Exchange on Friday.