Ayala Corp. earnings jump by 3% in Q2

By Arra B. Francia, Reporter
AYALA CORP. (AC) delivered a three percent profit increase in the second quarter of 2018, as the robust performance of its property and energy units offset a drop in earnings from its banking business.
In a statement issued Monday, the listed conglomerate said net income attributable to the parent went up to P8.4 billion in the April to June period.
On a six-month basis, AC’s attributable profit grew by seven percent to P16.1 billion, compared to the P15.1 billion it generated in the first half of 2017. Revenues stood at P148.7 billion for January to June period, 20% higher than the P123.9 billion recorded in the same period a year ago.
“These results validate our long-term strategy to achieve a more resilient portfolio by allocating capital to new businesses from which we can derive fresh sources of growth while continuing to expand our core businesses,” AC President and Chief Operating Officer Fernando Zobel de Ayala said in a statement.
Ayala Land, Inc. (ALI) generated 18% higher earnings for the first half to P13.5 billion, after revenues jumped by a fourth to P80.4 billion. The listed property developer benefited from the growth of its property development and commercial leasing segments.
Reservation sales rose 17% to P72 billion in the first semester, while commercial leasing revenues gained 15% to P16.9 billion following the addition of more malls, offices, and hotels.
However, Bank of the Philippine Islands (BPI), saw a 5.7% drop in earnings to P11.03 billion in the first half, weighed down by lower non-interest income and higher operating expenses, despite a 5.3% increase in revenues to P37.22 billion.
Total loans from BPI reached P1.22 trillion, 15.7% higher year-on-year. This was tempered however by a 17-basis point increase in costs of funds due to higher documentary stamp tax on deposits.
Globe Telecom, Inc. grew its net income by 21% to P9.8 billion in the first semester. Service revenues went up nine percent to P68.3 billion, driven by the expansion of the company’s 4G and LTE network. Data-related businesses accounted for 58% of Globe’s service revenues, given the growing demand for content-rich offerings and multi-media applications.
The listed telco player had 65.1 million mobile subscribers by end-June, nine percent higher year-on-year, as it worked on attracting high-value subscribers for prepaid services.
Manila Water Company, Inc. expanded its net income by 10% to P3.6 billion for the first half, 10% higher year-on-year. The water provider’s revenues climbed by eight percent to P9.6 billion, thanks to higher billed volumes in the Manila concession, which reached 250 million cubic meters, up by three percent from the same period a year ago.
Revenues from Manila Water Philippine Ventures, which has businesses in Clark, Laguna, Boracay and Cebu, gained 14% to P1.7 billion due to the expansion of its service coverage.
Meanwhile, AC Energy booked P2.1 billion in net earnings during the first semester, around twice what it generated in the first half of 2017. The company said it delivered strong results from its wind, geothermal, and thermal platforms.
“With the steady state operations of its platforms and consistent value realization initiatives, we are happy to see AC Energy starting to provide the necessary balance to some of our more cyclical and longer gestation businesses,” Mr. Zobel said.
For its industrial technologies business, AC Industrials’ net income increased 2% to P752 million. The company attributed this to a one-time gain from Integrated Micro-electronics, Inc., which was tempered by the lower earnings of its automotive retail unit that recorded weaker sales of Honda and Isuzu vehicles.
Regina Capital Development Corp. Managing Director Luis A. Limlingan said the company’s earnings were in line with expectations.
“(AC is) in line, as second quarter net income rose by 3% to P8.4 billion, driven by robust earnings of ALI, Globe and AC Energy,” he said in a mobile message.
Shares in AC shed 3.2% or P31.50 to close at P953.50 each at the stock exchange on Monday, alongside the 2.17% decline in the main index.