Source: Philippine Daily Inquirer
13 November 2019 – The country’s oldest conglomerate, Ayala Corp., said its profit almost doubled to P46.2 billion in the first nine months of the year, backed by the growth of its traditional businesses and its relativity new power subsidiary, AC Energy Inc.
It said revenue from January to September rose by 4 percent to P232.88 billion.
Ayala, which also recognized a nonrecurring gain on the merger of its education businesses and partial divestment of energy assets, said the year-on-year gains were driven by Bank of the Philippine Islands, Ayala Land Inc., Globe Telecom and AC Energy.
This offset the weaker performance of Manila Water Co. Inc. and losses at AC Industrials, the holding company for the group’s manufacturing and car distribution units.
Overall, earnings from the conglomerate’s units jumped 77 percent to P51.9 billion. In the third quarter alone, Ayala’s net profit increased by 7 percent to P8.3 billion while equity earnings increased 4 percent to P10.2 billion.
“We are pleased to see sustained growth in most of our core businesses continuing to provide stability in our earnings. AC Energy has quickly become a significant contributor to our portfolio,” Ayala president and chief operating officer Fernando Zobel de Ayala said in a statement on Monday.
AC Energy posted a net income of P24.3 billion in January to September this year. The company cited gains from the divestment of assets and recovery costs booked from adjustments in the construction and operations of power plants.
“We continue to be mindful of the challenges in some sectors, particularly AC Industrials and the global manufacturing space,” Zobel added. “We believe the strategies put forth in AC industrials continue to be promising but are saddled near term by geopolitical and trade issues.”
AC Industrials posted a net loss of P1.6 billion during the nine-month period across its business lines. The company owns listed Integrated Micro-Electronics Inc., whose earnings declined as the global automotive market slowed.
“Persistent contraction in the automotive sector, particularly in China, has brought down customer demand forecasts, leading to challenged margins as new manufacturing lines are temporarily underutilized,” Ayala said.
AC Motors’ posted a net loss of P262 million on lower sales volume of the Honda, Isuzu and Volkswagen brands. Ayala cited intensifying competition alongside supply issues.
Ayala deployed P15.1 bilion in capital expenditures during the nine-month period or 67 percent of the full-year budget. Spending went to its power, industrial technology and infrastructure projects.