Ayala Corp. (Ayala), the country’s oldest conglomerate, said net profit in the first quarter rose 22 percent year-on-year to P5.5 billion, boosted by a P1.8 billion capital gain from a stake sale and despite the weak earnings contribution from its banking arm, Bank of the Philippine Islands.
The conglomerate said net income in the quarter grew to P5.5 billion from P4.5 billion in the same period last year, driven by its real estate, telecom, water and international businesses and the capital gain from the sale of Stream Global Services, Inc., a unit of its business process outsourcing subsidiary Liveit.
In January, Liveit sold its stake in Stream Global to customer management service giant Convergys Corp.
Ayala Corp. said the strong performance of its business units, combined with the capital gain, offset the decline in the earnings contribution of BPI.
BPI earlier said first-quarter profit declined 57 percent to P3.6 billion as the previous year’s results included significant gains from trading securities.
“We are confident this momentum will continue for the rest of the year as the fundamental drivers of domestic economy remain firmly in place. This will continue to underpin demand for our real estate products, banking, telecom and water services,” Fernando Zobel de Ayala, president and chief operating officer of Ayala Corp., said in a disclosure to the local bourse.
Ayala Corp.’s real estate unit, Ayala Land, reported a 25-percent growth in net income to P3.5 billion, while telecom unit Globe Telecom reported a more than four-fold increase in net income to P2.9 billion from P686 million a year earlier. Water unit Manila Water Co. Inc.’s net income also rose nine percent to P1.4 billion.
Ayala’s international businesses also registered continued improvement in earnings. Integrated Microelectronics, Inc.’s (IMI) net income increased 20 times to P226 million, while LiveIt earned $800 million in the first quarter against $700 million in the same period last year.
For this year, Ayala Corp. is allocating P49 billion for capital expenditure mainly for its investments in BPI, ongoing power projects, and transport infrastructure projects.
Ayala Corp. has also recently entered the education sector with the upcoming opening of nearly a dozen new high schools under the Affordable Private Education Center (APEC) which will be located in Quezon City, Caloocan, Marikina, Pasig and Manila.