Ayala on track to hit P50-B profit by 2020

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CONGLOMERATE Ayala Corp. said Friday it is on track to meet its income target of P50 billion by 2020 as the company continues its strong performance driven by the real estate and power generation businesses.

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“[We are] on track but that’s [for]2020 … We are very optimistic about the future and prospects for the second half,” Ayala Corp. Chief Finance Officer Jose Teodoro Limcaoco told a news briefing in Makati City.

“For full year [2017], we expect to be roughly about mid-teens for the growth,” he added.

The conglomerate said net income expanded to P15.1 billion in the first half of the year, up 9.4 percent compared with the P3.8 billion registered in the same period last year.

Equity earnings stood at P17.4 billion, 6 percent higher from a year ago, underpinned by robust contributions from Ayala Land, Inc. and AC Energy which grew 17 percent and 64 percent, respectively.

For the second quarter alone, Ayala recorded a net income of P8.1 billion, up 2 percent from the year-ago level.

“That’s a result of the BPI’s [Bank of the Philippine Islands] performance last year. Remember last year they had strong trading gains … but if you strip out their one-time gain that they booked on the second quarter last year, they’re actually up 44 percent, so that’s the reason why our second quarter [2017] is also relatively slower or relatively flat versus last year second quarter because last year’s second quarter had that gain from BPI which is about P4.8 billion,” Limcaoco said.

“It’s quite still a healthy result,” he added.

Ayala Land sustained its growth trajectory in the first half with net income of P11.5 billion, up 18 percent from P9.74 billion in the same period last year.

BPI continued its investments to ramp up its digitization strategy and coupled with lower securities trading gains, this resulted in net income of P11.7 billion, about 8 percent lower than a year ago.

Telecommunications unit Globe Telecom’s net earnings dropped 10 percent to P8.1 billion in the first half on higher depreciation, interest expense, and costs related to the acquisition of San Miguel’s telecom assets. Water unit Manila Water’s net income was at P3.2 billion.

Other businesses such as AC Industrials saw net income of P739 million in the first half, while AC Energy posted earnings of P949 million on improved efficiencies of its operating coal plants combined with feed-in-tariff earnings from its solar plant, as well as fresh contributions from Chevron’s geothermal assets in Indonesia.

Ayala’s balance sheet remains at a comfortable level. Cash at the parent level amounted to P12.1 billion while net debt stood at P64.4 billion.

Earlier, Ayala Corp.’s Board of Directors approved the filing of a three-year shelf registration with the Securities and Exchange Commission of up to P30 billion worth of debt securities in one or more tranches. The shelf registration provides Ayala financial flexibility to issue debt instruments opportunistically as market conditions permit.

Ayala Corp. is one of the largest and oldest conglomerates in the country.

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