Ayala doubles profit in 9 months

MANILA, Phillipines — Ayala Corp., the country’s oldest conglomerate, doubled its nine-month net income to P46.2 billion, buoyed by the performance of its banking, telecommunications, real estate and power units.

This cushioned the impact of weaker result of AC Industrials, which is experiencing headwinds as a result of weaker global manufacturing activities.

In the third quarter alone, Ayala’s net profit expanded seven percent to P8.3 billion, supported by robust results from BPI and AC Energy, said Ayala president and chief operating officer Fernando Zobel de Ayala.

“We are pleased to see sustained growth in most of our core businesses continuing to provide stability in our earnings. AC Energy has quickly become a significant contributor to our portfolio,” Zobel said.

For AC Industrials, the setbacks are temporary, he said.

“We believe the strategies put forth in AC industrials continue to be promising, but are saddled near-term by geopolitical and trade issues. The pipeline of opportunities remains strong and efforts to manage the effects of this near-term uncertainty are being aggressively addressed,” Zobel said.

Among the different businesses, Ayala Land posted a net income of P23.2 billion during the nine month period, up 12 percent on strong revenue from office, commercial and industrial lot sales, and commercial leasing assets.

Bank of the Philippine Islands posted a 30 percent hike in net earnings to P22 billion. Total revenue increased 25 percent to P71 billion, driven by a 20 percent year-on-year growth in net interest income which reached P48.7 billion.

Globe Telecom’s net profits reached P17.7 billion, 20 percent higher than the previous year largely due to the continued shift toward data-related services and a growing subscriber base.

On the other hand, Manila Water’s nine-month net profit dropped 11 percent to P4.4 billion as Metro Manila’s water crisis early this year continued to weigh down on its core concession.

AC Energy posted a nine-month net profits of P24.3 billion, lifted by the recovery of costs incurred from adjustments in the construction and operations of its power plants and gains from the partial divestment of its thermal assets.

AC Industrials incurred a net loss of P1.6 billion, mainly on weak performance across its business lines.

Integrated Micro-Electronics Inc. continues to weather challenges in its main market segments in the slowing global automotive space.

IMI recorded a significant drop in its net profit to $451,000 as the continued slowdown in IMI’s main market segments, compounded by the effects of various geopolitical issues, hindered growth.

“Persistent contraction in the automotive sector, particularly in China, has brought down customer demand forecasts, leading to challenged margins as new manufacturing lines are temporarily underutilized,” Ayala Corp said.

In vehicle distribution and retail, AC Motors registered a net loss of P262 million on lower sales volume of the Honda, Isuzu, and Volkswagen brands due to continued intensifying competition, combined with supply issues which affected unit availability.

Ayala said other players in the highly competitive Philippine automotive market continue to compete aggressively for incremental sales volumes amid the slowly recovering customer demand.