Ayala Corporation experienced a dramatic surge in profitability during the third quarter, reporting a net income leap of 96.16% to reach P22.91 billion. This substantial increase marks a significant upswing from the P11.68 billion recorded during the same period last year, signaling robust performance across its diverse holdings.
Underlying this impressive growth was a 4% year-on-year increase in core net income, reaching P12.8 billion. The primary drivers were strong contributions from two of Ayala’s flagship companies: Bank of the Philippine Islands (BPI) and Ayala Land, Inc. (ALI), bolstered by positive momentum within its broader portfolio.
The company’s portfolio businesses – encompassing AC Health, AC Logistics, Integrated Microelectronics, and iPeople – all played a role in the overall positive trend. Ayala’s CEO, Cezar Consing, expressed confidence in the Philippine economy, pointing to recent initiatives in the retail sector, including investments in Makro and Spinneys, as evidence of this optimism.
Despite a slight slowdown in the nation’s gross domestic product growth, Ayala’s core businesses demonstrated remarkable resilience. Excluding one-time gains, core net income remained stable at P36.6 billion, highlighting the strength of its fundamental operations.
Looking at the first nine months of the year, Ayala’s attributable net income climbed by 36.22% to P46.27 billion. This substantial increase was largely fueled by a significant one-time gain resulting from the revaluation of AC Ventures, which holds Ayala’s stake in Mynt.
The gain stemmed from Mitsubishi’s acquisition of a 50% stake in AC Ventures, effectively altering Ayala’s indirect ownership in Mynt. This strategic move unlocked considerable value and contributed significantly to the overall financial performance.
Performance across Ayala’s key subsidiaries presented a mixed picture. While BPI and ALI both experienced net income growth, Globe Telecom and AC Energy (ACEN) faced headwinds, reporting declines due to revenue pressures and increased expenses.
BPI’s net income rose by 5% to P50.5 billion, propelled by robust loan growth and an expanding net interest margin. The bank also maintained a strong return on equity, standing at 15%.
Ayala Land mirrored this success, with net income increasing by 1% to P21.4 billion. This growth was supported by consistent property development revenues and solid performance in its leasing and hospitality businesses.
Conversely, Globe Telecom’s core net income decreased by 12% to P15.5 billion, impacted by lower service revenues and rising operational costs. ACEN’s core net income also fell, dropping 18% to P4.3 billion.
ACEN’s decline was attributed to damage sustained at its wind farms, coupled with weaker market prices and the introduction of new depreciation costs. These factors collectively weighed on the company’s profitability.
ACEIC, ACEN’s parent company, experienced a significant 59% decline in net income, reaching P4.2 billion. This downturn was primarily driven by reduced contributions from ACEN and its thermal plants, alongside a decrease in net interest income.
However, not all segments faced challenges. AC Health dramatically narrowed its net loss from P417 million to just P9 million, a testament to strong performance within its provider businesses and a strategic gain from the sale of KMD shares.
ACMobility also reversed a previous loss, posting a net income of P18 million compared to a loss of P176 million the prior year. Increased sales volume played a key role in reducing losses within its distribution and dealership network.
Integrated Microelectronics, Inc. (IMI) also demonstrated a remarkable turnaround, reporting a net income of $14.8 million, a significant improvement from the $9.2-million loss recorded last year. This positive shift was driven by improved operational efficiency and increased facility utilization.
Despite the overall positive financial results, Ayala Corp. shares experienced a slight dip on Thursday, falling by 0.05% or 20 centavos to close at P420.80 apiece.
