Quarterly comparison shows improvement as economy reopens

EARNINGS of Ayala Corp. plunged double digits in the third quarter as its core business units continued lagging on coronavirus pandemic-related challenges.

In a statement on Thursday, the conglomerate said it recorded an attributable net income of P3.4 billion in the July-to-September period, shrinking 59% from the P8.3 billion it reported a year ago.

Its core business segments posted double-digit profit drops: Ayala Land, Inc. by 77% to P1.8 billion, Bank of the Philippine Islands (BPI) by 34% to P5.5 billion, and Globe Telecom, Inc. by 22% to P4.4 billion.

Its power business, through AC Energy, Inc. posted a net income of P1.1 billion, while its industrial technologies business, through AC Industrials, booked a net loss of P224 million.

Despite the year-on-year decline, Ayala said its third-quarter performance has improved on a quarterly basis. Net income grew more than double from the second quarter’s P1.3 billion, which it linked to increased economic activity due to the relaxation of quarantine rules.

“It is encouraging to see improvements in the performance of our businesses as the economy gradually reopens… We are hoping to see this trajectory sustained in our businesses with a further loosening of restrictions,” Ayala President and Chief Operating Officer Fernando Zobel de Ayala said.

In the nine months from January to September, Ayala saw a net income of P11.4 billion, slumping 75% against the same period last year. Revenues likewise dropped from 28% to P153.76 billion.

All business units posted lower earnings due to the multi-sector impact of the ongoing lockdown.

Ayala Land’s net income slid 73% to P6.4 billion, which it attributed to a decline in project bookings, limited construction activity, lower foot traffic in malls and hotels, and closure of resorts.

BPI also recorded 22% lower profit at P17.2 billion, mainly due to some P21.2-billion loan loss provisions that the company rolled out in anticipation of non-performing loans because of the pandemic.

Telco arm Globe posted a 10% earnings decline to P15.9 billion, as its depreciation expenses grew due to investments in expanding its network.

AC Energy’s profit tumbled 77% to P5.6 billion because of non-recurring gains from last year’s divestment in thermal assets.

Manila Water Co., Inc. saw a 29% income drop to P3.1 billion, driven by mpairment losses in a subsidiary, an increase in direct costs, and higher depreciation and interest expenses.

AC Industrials booked a P2.1-billion net loss, 31% higher than last year’s P1.6 billion, as its local automotive business continued suffering from mobility restrictions.

Ayala shares closed at P870 apiece on Wednesday, up to P30 or 3.57% from the last session. The market was closed for trading on Thursday due to a typhoon. — Denise A. Valdez

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