Ayala net income surges 46% to P18.6 B

MANILA, Philippines - The country’s oldest conglomerate Ayala Corp. (AC) said it expects to hit early its P20-billion net income target after its earnings last year jumped nearly half behind the robust performance of its real estate, telecom and electronics manufacturing units.

AC said yesterday its net income in 2014 soared 46 percent year-on-year to P18.6 billion fueled by a net gain from the sale of its business process outsourcing asset and the solid earnings growth of most of its business units.

Without the impact of the accelerated depreciation from its telecom unit’s network transformation initiative in the previous year, AC said it core net income grew 25 percent year-on-year in 2014.

AC’s profits have been growing above 20 percent for the past three years.

“We are very pleased with the performance of our business units as they continue to benefit from the aggressive growth strategy they executed a few years ago. This has, in turn, allowed us to optimize earnings and value at the parent level. We continued to invest in new areas of growth, particularly in power generation and transport infrastructure,” AC president and chief operating officer Fernando Zobel de Ayala said.

With the unprecedented earnings growth last year, AC said it now believes it can achieve its P20-billion net earnings target this year, which was earlier eyed by 2016.

“As our business units sustain their growth momentum and the overall business environment continues to be encouraging, we are optimistic we can achieve our net income target of P20 billion this year, a year ahead of the plan,” Zobel said.

For 2014, AC said the robust earnings performance was a result of the strong equity earnings contribution from its business units which reached P24.9 billion.

Equity earnings from property unit Ayala Land Inc. rose 28 percent year-on-year while contributions of Globe Telecom Inc. more than doubled and that of Integrated Micro-Electronics Inc. expanded three-fold.

In addition, AC said the P1.8 billion net divestment gain from Stream Global Services Inc. boosted equity earnings during the year.

“The strong equity earnings from these business units counterbalanced the relatively flat contribution from the Bank of the Philippine Islands, which registered lower trading income during the year,” the conglomerate said.

The Ayala Group has earmarked P185 billion in combined capital expenditures this year mainly to support the massive expansion plans of its real estate and telecom units.

At the parent level, AC said it has set aside P21 billion in capital spending in 2015 to fund its growing pipeline of power generation and transport infrastructure projects, among others.