Ayala Corp. makes P8.2B

AYALA Corp.’s 2009 unaudited net income reached P8.2 billion, at par with the prior year’s earnings with substantially lower capital gains from share sales in 2009, the company said in a statement released through the Philippine Stock Exchange.

Excluding capital gains, net income grew by 34 percent. The growth was driven by the strong performance of its major business units, even amid a sluggish economic environment.

Ayala’s total equity share in the earnings of its business units rose by 18 percent to P9.2 billion.

"The Manny Pacquiao Blog". Click here for stories and updates on the Filipino boxing champ.

“Our efforts the past few years to strengthen our balance sheet prepared us well for the economic downturn,” said Ayala Corp. president and chief operating officer Fernando Zobel de Ayala.

“This position of financial strength amid a challenging environment kept our focus on strengthening each of our business units, enhancing our current portfolio, and seeking opportunities for future growth,” he said.

Real estate

In real estate, Ayala Land Inc.’s residential sales recovered beginning the second quarter, with take-up rates improving through the fourth quarter. Its leasing revenues from shopping centers and office/business process outsourcing (BPO) spaces grew by 20 percent with the expansion in gross leasable area and generally steady occupancy rates.

Ayala Land posted P4 billion in net income in 2009, 16 percent lower than in the prior year, which included gains from a lot sale. Excluding the impact of the lot sale, net income was down by only two percent.

Ayala Land is embarking on its most aggressive launch this year as it expands its presence in key cities and areas in the Philippines. The company recently sealed several lease and joint venture agreements with strategic partners for the construction of regional malls in the Subic Bay Freeport Area and Cagayan de Oro.

It opened MarQuee Mall in Pampanga in September last year and will also unveil Abreeza Mall in Davao City next year.

Banking unit

Its banking unit, Bank of the Philippine Islands, registered strong business volume, revenue and earnings growth.

Net income was up 33 percent to P8.5 billion. Net interest income increased by 10 percent on account of the expansion in asset base and improvement in spreads.

Non-interest income grew at an even faster rate of 25 percent.

While corporate lending slowed, challenged by the high level of liquidity and the availability of funding through the capital markets, loans to small and medium enterprises, the consumer market, and credit card customers remained robust, expanding at double-digit levels.

The bank’s remittance business outpaced industry growth, resulted in BPI capturing over 20 percent of the overseas Filipino remittance business.

Telecommunications

Globe Telecom registered 11 percent earnings growth to P12.6 billion.

While its core mobile business was weighed down by intense competition and subscribers’ increasing preference for value offers on the back of weaker consumption, Globe made significant gains in its broadband business.

Globe’s broadband subscribers expanded three-fold to over 715,000, while mobile subscribers reached 23.2 million by yearend.

Globe recently increased its dividend payout to a range of 75 to 90 percent of prior year’s earnings. In line with this, Globe declared its first semi-annual cash dividend of P40 per common share payable on March 15.

Water and electronics

AC Capital contributed positively in 2009, reversing the loss in 2008. This was driven by the strong earnings growth of water distribution unit Manila Water Co. Inc., the turnaround of the electronics manufacturing business Integrated Microelectronics Inc. (IMI), and the significantly improved performance of Ayala’s holding company for its BPO investments.

Manila Water posted a net income of P3.2 billion, 16 percent higher than in 2008 as it expanded its customer base, increased billed volume, and improved operating efficiency.

Outside of the east zone, Manila Water commenced the concessions in Laguna and Boracay with plans to improve the system, upgrade the existing network, reduce system losses, and improve reliability of water and wastewater services.

Manila Water is also exploring water projects overseas and signed joint venture agreements with REE Corp. in Vietnam and Jindal Water Infrastructure Ltd. of
India to explore water and wastewater-related projects in these countries.

IMI posted a turnaround in 2009 with $10 million in consolidated net income, a reversal of the net loss in 2008. However, with the electronics sector weighed down by the global economic downturn, full-year revenues fell 10 percent to $395 million.

Revenue trends began to improve in the third quarter.

Ayala ended 2009 with cash of P30 billion and parent net debt to equity ratio of 0.04 to 1. It recently announced its intent to bid for the Angat Hydroelectric Plant in early 2010. (PR)