Ayala Corp. 2018 income grows 5% to ₧31.8B

CONGLOMERATE Ayala Corp. on Wednesday said its net income grew 5 percent to P31.8 billion last year from the previous P30.26 billion on strong contribution of its core businesses that spans telecommunications to banking to property development.

In its disclosure, the company said equity earnings of its units reached P39.4 billion, or 10 percent higher year-on-year.

Borrowing costs, however, increased as Ayala funded its investments with new debt, moderating

its net profits during the period, it said.

“The aggressive growth strategy that we embarked on over a decade ago has been unprecedented for the Ayala Group. Over the past 10 years, we spent close to P200 billion in capital expenditure at the parent level alone to support the investment programs of our various business units, including our new growth platforms in power, industrial technologies, infrastructure, education and health care,” the company’s president and COO Fernando Zobel de Ayala said.

“Our profitability has also improved steadily over the past 10 years, growing at a compounded annual rate of 15 percent,” he said.

Net income of the company’s listed core units Ayala Land Inc., Bank of the Philippine Islands, Globe Telecom Inc., Integrated Micro-Electronics Inc. (IMI) and Manila Water Co. all posted growth last year.

Unlisted firm AC Energy Inc.’s net earnings expanded 16 percent to P4.1 billion in 2018, largely driven by its domestic thermal and renewable assets, as well as higher contribution from its Indonesia investments.

AC Energy’s investee companies reached P3.6 billion, 37 percent higher than the previous year’s results.

Asia Industrial Technology Holdings Inc., meanwhile, had a net income fall of 53 percent year-on-year to P578 million, largely due to the weaker performance of its automotive businesses and start-up losses from newly acquired businesses.

This decline was partially offset by a one-time gain in its electronics manufacturing services arm, IMI, as its revenues expanded 24 percent to P70.8 billion on the back of a 16-percent growth in revenues from traditional businesses and a 61-percent growth in recently acquired companies.

AC Motors registered a 76-percent decline in net earnings to P164 million, owing to lower earnings of the group’s Honda and Isuzu dealerships, both hit by weaker sales amid an industry-wide slowdown. This was aggravated by lower contributions from AC Industrials’s investments in the Philippine distribution companies of Isuzu and Honda.

Volkswagen’s sales volume was affected by the delay in the delivery of its China-sourced vehicles.

AC Industrials continues to ramp up its automotive retail portfolio. In 2018, it partnered with Kia Motors and China’s SAIC Motor for the distribution of Kia and Maxus vehicles in the Philippines, respectively.

AC Industrial, through its subsidiary MT Technologies GmbH, has executed a share purchase agreement to acquire a 75.1-percent controlling stake in C-CON Group.

“C-CON significantly advances MT’s goal to offer end-to-end engineering, design and manufacturing services to its automotive customers. Beyond these, the addition of C-CON’s unique lightweight and high-strength carbon fiber technology further positions MT and AC Industrials to participate in the ongoing transformation of the mobility space, while opening the potential for applications in new markets such as aerospace, marine, architecture and power generation,” it said.

It did not disclose the price of the purchase.

Founded in 1991 and with eight locations and 200+ employees that span Germany’s automotive hubs, C-CON and its subsidiaries deliver design, development, engineering, manufacturing, series production and process-management services directly to leading German automotive original equipment manufacturers.