Real estate, power propel up Ayala’s 2017 income by 16%

By VG Cabuag - March 12, 2018

https://businessmirror.com.ph/real-estate-power-propel-up-ayalas-2017-income-by-16/

THE double-digit growth rates posted by real-estate and power businesses propelled Ayala Corp.’s net income last year to P30.3 billion, an increase of about 16 percent, from the P26.01 billion the company recorded in the previous year.

Strong equity earnings contributions from Ayala’s business units, which reached P35.8 billion, 12 percent higher from a year ago, helped boost its earnings, led by Ayala Land Inc. (ALI) and AC Energy Inc., whose equity earnings contributions expanded 21 percent and 30 percent, respectively.

“We are happy to see this earnings momentum sustained for the sixth consecutive year as the expansion strategy across our portfolio of businesses continues to bear fruit. Consistent double-digit growth since 2012 has translated to a compounded annual growth rate of 22 percent,” AC President and COO Fernando Zobel de Ayala said on Monday. “We remain positive about our trajectory as we move closer to our 2020 goals.”

The Ayala Group said it is increasing its capital expenditures this year by 44 percent to P249 billion, from last year’s about P173 billion. The company added it is meant to support the parent’s own investment program as well as the growth strategies of ALI, Globe Telecom Inc. and Manila Water Co. Inc. (MWCI).

At the parent level, Ayala has earmarked P51.8 billion in capital spending this year, primarily to fund its subscription to the stock rights offering of the Bank of the Philippine Island (BPI) and its investments in AC Energy, AC Industrials Technology Holdings Inc., Ayala Education Inc. and Ayala Healthcare Holdings Inc.

The resurgence of property sales combined with a solid leasing business drove ALI’s net earnings during the year, jumping 21 percent to P25.3 billion.

Revenues from property development, which includes residential and office-for-sale developments, as well as commercial lot sales, rose 23 percent to P101.5 billion on new bookings and project completion. Growth in reservation sales bounced back to double-digit levels during the year at 13 percent, reaching P122 billion.

BPI recorded a net income of P22.4 billion, up 1.7 percent from its year-ago level, as the absence of one-off gains tempered strong growth in its core banking business during the year. Globe Telecom’s net earnings dropped 5 percent to P15.1 billion last year. The company said the drop was due to higher operating expenses and depreciation charges as a result of increased investments in its data network.

MWCI posted flat growth to P6.2 billion as higher operating expenses and business development costs tempered topline growth during the year.

AC Energy’s net earnings jumped 31 percent to P3.5 billion in 2017, primarily driven by fresh equity earnings contribution from its geothermal platform, and boosted by solid contributions from its wind-energy assets. AC Industrials, meanwhile, registered a net income of P1.2 billion, up 4 percent from its year-ago level, on better performance of both its electronics manufacturing and vehicle retail units.

Integrated Micro-electronics Inc.’s net earnings expanded 21 percent to $34 million on the back of revenue growth, which exceeded the $1-billion mark during the year, driven by contribution from recent acquisitions and sustained growth in the automotive and industrial markets.