Ayala nets P32 B, sets P262 B capex for 2019

Ayala Corp., the country’s oldest conglomerate, is allotting P262 billion for capital expenditures this year.

Bulk of the amount has been earmarked for Ayala Land Inc. (ALI) and Globe, which have set aside P130 billion and P63 billion for capital expenditures this year, respectively.

The company reported a net income of P31.8 billion last year, up five percent on strong earnings contribution from its real estate, telecommunications, and power businesses.

Ayala president and chief operating officer Fernando Zobel de Ayala said the conglomerate’s aggressive growth strategy initiated over a decade ago is paying off.

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

Across the different segments, real estate arm ALI grew its net income 16 percent to P29.2 billion, primarily driven by the strong performance of its property development and commercial leasing businesses.

Banking arm Bank of the Philippine Islands reported a net income of P23.1 billion, up three percent from the previous year, boosted by the robust growth of its core banking business, but tempered by higher provisions and operational spending.

Data-driven demand across its business segments, meanwhile, bolstered Globe’s net income, which reached P18.6 billion or an increase of 22 percent.

Manila Water, the East Zone water concessionaire, recorded a net income of P6.5 billion, up six percent from the previous year, largely driven by the Manila concession and boosted by the contribution of its newly acquired platforms in Thailand and Indonesia.

Power subsidiary AC Energy, meanwhile, expanded its net income by 16 percent to P4.1 billion, largely driven by its domestic thermal and renewable assets as well as higher contribution from its Indonesia investments.

On the other hand, AC Industrials’ net income dropped 53 percent to P578 million, largely due to the weaker performance of its automotive businesses and startup losses from newly acquired businesses.

IMI reported a net income of P2.4 billion, up 34 percent from a year ago, boosted by non-operating items such as net gains from the sale of a China entity, while ACT Motors registered a 76 percent decline in net earnings to P164 million owing to significantly lower earnings of the group’s Honda and Isuzu dealerships.