CONGLOMERATE Ayala Corp. (AC) posted a net profit of P26 billion in 2016, up 17 percent from the year earlier, mainly on the back of double-digit growth contributions from its real estate and banking units and boosted by its emerging businesses in power and industrial technology.
“This positive earnings momentum was driven by the robust equity earnings contribution from Ayala business units, which expanded 14 percent from its year-ago level, to P32 billion. Equity earnings from the Bank of the
Philippine Islands [BPI] and Ayala Land [ALI] jumped 19 percent and 18 percent, respectively. Meanwhile, equity earnings from AC Energy soared 27 percent, while equity earnings from AC Industrials grew 51 percent as its automotive business surged nearly fivefold during the year,” Ayala Corp. said in a statement on Monday.
With the strong 2016 result, Ayala surpassed its five-year goal starting 2011 to grow net income to the P20-billion mark.
“Ayala capped its five-year strategic target in 2016 with net income expanding nearly threefold and a 23 percent compounded annual growth rate since we put the plan in place in 2011. We believe this was achieved through our disciplined execution and a strong domestic environment,” AC President and Chief Operating Officer Fernando Zobel de Ayala said in a statement.
Property unit ALI grew its net income by 19 percent to P20.9 billion in 2016 while banking arm BPI saw profits climb 21 percent to P22.05 billion.
AC Energy’s net income grew 25 percent to P2.7 billion, while AC Industrials —composed of semiconductor maker Integrated Micro-Electronics Inc. (IMI) and car distributor AC Automotive —improved net profit by 29 percent to P1.8 billion.
Water subsidiary Manila Water Company Inc. grew its income by 2 percent to P6.1 billion, but its telecoms business under Globe Telecom Inc. saw profits decline by 4 percent to P15.9 billion.
The conglomerate is now aiming to hit a net income of P50 billion by 2020 through expansion and acquisitions.
In a press briefing on Monday, AC Chief Financial Officer Jose Teodoro Limcaoco said they are looking at “disruptive” and “synergistic” acquisitions and partnership opportunities.
“We’re giving a lot of effort to look for these types of disruptive acquisitions…We want them to have more synergies with our existing core businesses, disruptive and innovative,” Limcaoco said.
He cited four acquisitions Ayala has already made: a 43-percent stake in online fashion retailer Zalora Philippines, a 10 percent stake in Globe’s financial technology unit MINT, a minority stake in e-pharmacy MedGrocer, and another minority interest in a solar power technology start-up based in Silicon Valley.
With the acquisition of MedGrocer, Ayala is also moving ahead of the healthcare sector with its $100 million to $200 million committed investment in the next five years. It plans to open 130 Generika pharmacy outlets this year to bring the total number of stores to 800 by end-2017. It is also building 18 FamilyDoc clinics to end the year with 25 clinics.
For 2017, Ayala has set a spending program of P185 billion, which is 13 percent higher than its capital expenditure last year.