Ayala Q3 attributable profit dips
AYALA CORP. (AC) saw its attributable profit drop by five percent in the third quarter of 2018, as the higher earnings from its property unit failed to offset the weakness of its industrial business and the absence of transaction gains from the power segment.
In a disclosure to the stock exchange on Wednesday, the country’s oldest conglomerate said it generated P7.8 billion from July to September. AC attributed the slowdown to AC Industrials and AC Energy, noting that the latter booked services income from the financial close and construction of a new power plant.
Without transaction gains, AC’s attributable profit would have grown six percent year-onyear.
On a nine-month basis, AC’s net income attributable to owners of the parent went up by three percent to P23.86 billion, from P23.24 billion in the same period a year ago. The company posted higher interest expenses at the parent level due to increased borrowing to finance its capital spending, tempering the strength of its real estate, telco, and power businesses.
Revenues meanwhile surged by 18% to P223.48 billion.
“These results reflect the value of having a well-diversified portfolio. While some businesses have more exposure to the impact of certain local and global macroeconomic and industry challenges, other businesses have been fairly insulated and are providing a positive balance to our portfolio,” AC President and Chief Operating Officer Fernando Zobel de Ayala said in a statement.
For property, Ayala Land, Inc. (ALI) grew its earnings by 17% to P20.8 billion on account of higher demand for its residential properties, complemented by its commercial leasing business. Revenues jumped 21% to P119.7 billion.
The listed property developer’s reservation sales went up by 15% to P108.4 billion. It also benefited from the opening of new malls, offices, and hotels, as commercial leasing revenues firmed up 14% to P25.3 billion.
Bank of the Philippine Islands recorded flat earnings at P17 billion, despite a 7.3% uptick in revenues to P56.9 billion. Its total assets reached P1.96 trillion as of end-September, 8.9% higher year-on-year.
Globe Telecom, Inc. grew its attributable profit by 17% to P15.16 billion, following a nine percent increase in service revenues to P103.3 billion. The company has been expanding its 4G and LTE network to accommodate the demand for contentfilled products and multi-media apps. With this, the data-related business accounted for 59% of service revenues.
Meanwhile, Manila Water Company, Inc. logged a net income of P4.9 billion, a percent higher year-on-year, as revenues grew seven percent to P14.4 billion. It recorded a 3% growth in billed volume in the Metro Manila East Zone concession to 378 million cubic meters.
At the same time, the firm booked a strong performance from its Vietnam subsidiaries, with equity share in net income of associates surging 82% to P514 million.
AC Energy improved its net earnings by 39% to P2.8 billion for the period, driven by its thermal and renewable platforms.
Earnings of AC Industrials fell by 27% to P758 million, dragged by its automotive business and start-up losses from new businesses. Weak sales from the Honda and Isuzu dealership, alongside the company’s further investment into the dealerships, prompted a 67% profit decline to P157 million.
Sought for comment on AC’s performance, Philstocks Financial, Inc. Research Associate Piper Chaucer Tan said the flattish quarter is “justifiable.”
“AC is investing on its power plant... which it is counting on for future growth .... With the influx spending in Christmas season, we think that AC can deliver its earnings guidance for 2018 moving forward,” Mr. Tan said via text.
Shares in AC added 0.56% or P5 to close at P900 each on Wednesday.