Ayala Group Q1 net profit down 8% at P5B

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Property unit Ayala Land hikes earnings by 19% to P4.1B

AYALA Corp. (AC), the country’s oldest conglomerate, posted an 8 percent drop in net income for the first quarter, compared with the year-earlier earnings which had extraordinary income from the divestment of its business process outsourcing (BPO) unit.

In a statement, Ayala said its first-quarter net income was down at P5 billion from P5.5 billion recorded in the same period last year.

“Without the effect of the P1.8 billion divestment gains from its business process outsourcing unit in 2014, Ayala’s first quarter earnings grew 39 percent,” the company said.


Last year, Ayala subsidiary LiveIt Investments Ltd. reported a boost in net income due to the divestment of BPO unit Stream, resulting in a P1.8-billion one-time gain for the group last year.

For the first quarter, the conglomerate reported a 27-percent increase in revenues to P6.4 billion due to strong performances across its business segments.

“We continue to be encouraged by the strong performance of the businesses across the group. We remain optimistic that we can sustain the strong first quarter results throughout the rest of the year, and stay on track to meet our strategic goals and financial targets,” Ayala Corp. president and chief operating officer Fernando Zobel de Ayala said.

Ayala Land Q1 profit improves
Meanwhile, property vehicle Ayala Land Inc. (ALI) boosted its net income for the first quarter by 19 percent to P4.1 billion from P3.5 billion a year ago.

It said consolidated revenues increased 10 percent to P25.1 billion from P22.7 billion on the back of robust property development, commercial leasing operations and increased number of integrated mixed-use townships nationwide.

“Our first quarter results provide a good takeoff point towards the achievement of our targets for the year. We continue to introduce new estates and products in various geographies that will allow for sustained growth in 2015,” said Bernard O. Vincent Dy, ALI president and chief executive officer.

Dy said the company is “on track” on its 2020-40 plan, which involves growing ALI’s profits by 20 percent yearly to P40 billion by 2020 from P11.7 billion in 2013.

In the first three months of the year, he said the company has spent P18.6 billion or 19 percent of its P100-billion capital expenditure (capex) program for this year on project launches and development.

ALI’s revenues for property development — which include sales of residential, office, commercial and industrial lots — increased 18 percent to P15.9 billion in the first quarter from P13.5 billion a year ago.

Commercial leasing sales also improved by 11 percent to P5.9 billion while revenues in the services segment rose 24 percent to P9.3 billion.

Banking, telecom, other units
Meanwhile, Ayala banking unit Bank of the Philippine Islands’ (BPI) first quarter net income climbed 26 percent to P4.9 billion from a year earlier, driven by a 15 percent increase in net interest income and a 23 percent increase in non-interest income.

Telecom unit Globe Telecom Inc. posted a 43-percent increase in net income to P4.2 billion as data revenue grew 13 percent across major service lines.

Integrated Micro-Electronics Inc. (IMI), its semiconductor and electronics unit, reported that revenue grew 27 percent to P288 million on the back of better margins despite foreign exchange losses.

Water distribution unit Manila Water Company Inc. reported flat earnings of P1.4 billion.

In power generation, Ayala said its unit AC Energy Holdings Inc. has also expanded its capacity. As of end-March, AC Energy has secured the feed-in-tariff for an 81-megawatt (MW) wind farm of the North Luzon Renewable Energy Company and the 19-MW expansion of Northwind Power Development Corp. AC Energy also commenced operations for the first 135-MW unit of South Luzon Thermal Energy Corp. in April.

For the whole group, Ayala has programmed capex of P185 billion this year to boost each segment and expand its projects in the power and transportation sector.

Ayala Corp. is targeting 25-30 percent annual growth in profits and sales in line with its above 20-percent growth for the past three years.

Founded in 1834 and incorporated in 1968, Ayala Corp. is the holding company of the Ayala family’s businesses, which include water (Manila Water), telecommunications (Globe), property (ALI), semiconductors (IMI), banking (BPI), power (AC Energy), infrastructure (AC Infrastructure Holdings Corp.) and BPO and education (LiveIt Investments), among others. It is 50.56-percent owned by Mermac Inc., 10.52 percent by Mitsubishi Corp. and 38.92 percent by the investing public.

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