Commenting on the marked improvement in the company’s performance, Ayala Corp. chairman and chief executive officer Jaime Augusto Zobel de Ayala II said: "We are pleased to see the continued growth of our subsidiaries and affiliates. We believe this momentum can be sustained throughout the year supported by the positive trends in the broader macro-economic environment. The recent resurgence in investor confidence in the market is indicative of the optimism that these developments will eventually benefit key sectors of the economy."
Real estate unit Ayala Land posted a net income of P1.18 billion in the first quarter, slightly higher than the P1.16 billion registered in the same period last year. Factoring out one-time gains from non-core asset sales as well as the provisions made in 2005, net income would be up by 112 percent year-on-year.
Consolidated revenues, however, fell 21 percent to P5.5 billion, mainly due to the sale of AIVI shares last year.
However, revenues from its core and support businesses grew 15 percent to P4.7 billion due to the improved performance across most of its business lines.
Revenues from residential development rose 28 percent on higher construction accomplishment and increased unit sales bookings.
Shopping center revenues likewise grew 13 percent as a result of higher occupancy rates and gross leasable area with the opening of Phase 1B of Market!Market! The corporate business segment also posted strong growth with revenues up 75 percent, mainly with higher occupancy rates and boosted by office space sales and business process outsourcing (BPO) building rentals.
The Bank of the Philippine Islands earned a net income for the quarter of P2.5 billion, 27 percent higher than the P2 billion income in the same period last year. Higher net interest income and non-interest income pushed total revenues up by nine percent. Net interest income was up two percent while non-interest income grew 22 percent due to trading gains and the strong performance of the bank’s insurance subsidiaries, asset management and trust group.
The bank’s operating expenses grew at a slower four percent pace year-on-year despite additional expenses from newly-acquired Prudential Bank’s operations. Cost-to-income ratio was at 52 percent.
Globe Telecom, meanwhile, registered a net income of P3.5 billion or an increase of 19 percent year-on-year. Net service revenues went up five percent to P14.2 billion, driven by a two percent growth in its wireless subscriber base and higher revenues from its voice and data segments.
Total wireless subscribers as of the end of the quarter reached 13.2 million. Cost efficiency and streamlining measures pushed operating expenses 15 percent lower. This pushed earnings before interest, taxes, depreciation and amortization (EBITDA) up 23 percent to an all-time high of P9.7 billion and EBITDA margin to 68 percent from 59 percent on a year-on-year basis.
Meanwhile, AC Capital’s earnings contribution during the quarter reached P720 million, down 39 percent from the previous level. Excluding last year’s dilution gains from Manila Water’s initial public offering however, its earnings contribution would be 79 percent higher year-on-year. Integrated Microelectronics and Manila Water were the main drivers.
Manila Water posted a net income of P600 million, up 24 percent from P484 million. Revenues grew 16 percent to P1.5 billion with consistent growth in billed volume and increased operational efficiencies. Billed volume increased to 887 million liters per day, seven percent higher than first quarter last year and double the level in 1997. Manila Water’s customer base increased to 741,000 households with the addition of 65 kilometers of new pipelines during the quarter. Non-revenue water (NRW) continued to decline to reach a new all-time low of 34 percent.
Consolidated net income of Integrated Microelectronics reached P471 million, up 50 percent from P313 million in the same period last year. Revenues more than doubled as a result of the acquisition of Speedy Tech Electronics and Saturn’s Cebu operations last year. However, revenues from Philippine operations alone rose 13 percent. With the on-going integration of recent acquisitions, IMI is also setting up a manufacturing facility in Chongqing, Sichuan to cover the western China market.
Ayala Corp’s financial position continues to strengthen with debt down to P40 billion from P45 billion at the end of last year. Net debt to equity ratio further improved to 0.43 to 1 by the end of the quarter from 0.49 to 1 at the end of 2005.