MANILA, Philippines – Ayala Corporation (AC), the holding firm of the Ayala Group, saw its bottom line rise by 16%, led by its property development and energy units.
AC told the Philippine Stock Exchange (PSE) on Monday, March 12, that it recorded a net income of P30.3 billion in 2017, up 16% from the P26 billion in 2016.
"We are happy to see this earnings momentum sustained for the 6th consecutive year as the expansion strategy across our portfolio of businesses continues to bear fruit. Consistent double-digit growth since 2012 has translated to a compounded annual growth rate of 22%," said AC president and chief operating officer Fernando Zobel de Ayala in a statement.
Ayala Land leads earners
Equity earnings contributions from Ayala's business units hit P35.8 billion, up 12% higher from 2016, led by Ayala Land Incorporated (ALI) and AC Energy Holdings Incorporated, whose equity earnings contributions grew by 21% and 30%, respectively.
ALI recorded net earnings of P25.3 billion in 2017 as property sales grew 13% to P122 billion while leasing revenue grew by 10% to P31 billion with its new developments. It opened 5 malls and 6 office buildings along with the launching of 3 new estates last year.
AC Energy's net earnings jumped 30% to P3.5 billion in 2017, primarily driven by fresh equity earnings contributions from its geothermal platform, and from its wind energy assets.
AC Energy is building a portfolio of renewable energy projects. It acquired Salak and Darajat geothermal assets in Indonesia in early 2017 as well as solar and biomass producer Bronzeoak in March last year. It is also developing a 75-megawatt wind project in Sidrap, Indonesia, that is expected to come online in the 1st quarter of 2018.
Meanwhile, the Bank of the Philippine Islands (BPI) recorded a net income of P22.4 billion, up 1.7% from its year-ago level, as the absence of one-off gains tempered strong growth in its core banking business. Excluding one-off gains from the sale of securities in 2016, its net income grew 31% in 2017.
Globe Telecom Incorporated's net earnings dropped 5% to P15.1 billion in 2017 due to higher operating expenses and depreciation charges as a result of increased investments in its data network. The telco, along with parent AC, entered into a strategic partnership with Jack Ma's Ant Financial last year.
Manila Water Company Incorporated posted net income growth of 1% to P6.2 billion as higher operating expenses and business development costs tempered topline growth during the year. Revenues rose 5% to P18.5 billion, while operating expenses expanded 19% to P7.4 billion on higher overhead costs owing to Estate Water's expansion, business development costs, and a one-time write-off of uncollectible accounts in Laguna Water.
AC Industrial Technology Holdings Incorporated (AC Industrials) registered a net income of P1.2 billion, up 4% from 2016 on better performance of both its electronics manufacturing and vehicle retail units. The net income of Integrated Microelectronics Incorporated (IMI), a subsidiary of AC Industrials, expanded 21% to $34 million.
The Ayala Group as a whole is increasing its capital expenditures in 2018 by 44% to P249 billion, largely to support AC's investment program as well as the growth strategies of Ayala Land, Globe, and Manila Water.
AC on its own earmarked P51.8 billion in capital spending this year, primarily to fund its subscription to BPI's stock rights offering and its investments in AC Energy, AC Industrials, AC Education, and AC Health.
The cash on hand of the holding firm alone amounted to P18.6 billion, while debt stood at P83.3 billion. Net debt-to-equity ratio during the period was 0.59 at the parent level and 0.69 at the consolidated level.
Consolidated assets of the Ayala Group stood at P1.02 trillion as of end-2017, 12% higher than in 2016. – Rappler.com