Vol. XXII, No. 75-A [ BusinessWorld Online ]
Saturday, November 8, 2008 | MANILA, PHILIPPINES
AYALA UNITS Ayala Land, Inc. and Globe Telecom, Inc. reported weaker profits yesterday, pointing to rising costs and weaker sales, respectively.
Ayala’s property arm reported a drop in its July to September net income, at P1.02 billion or by close to a tenth, citing increases in the prices of construction materials despite the almost 50% increase in revenues to P8.62 billion.
For January to September, Ayala Land hiked its net income by 23% to P3.84 billion.
"The effect of the increase in the cost of materials eroded the margin. We expect this trend to continue next year," Jaime E. Ysmael, Chief Financial Officer of Ayala Land, told reporters.
There was a noticeable shift from the high-end market to lower-end market, he noted.
Mr. Ysmael noted that high-end homes are usually a form of investment which can be postponed.
"Globally, the third quarter is really the most difficult year," Mr. Ysmael said. "But our leasing unit still remains good. It is really the residential sector that has been most affected," he said.
Given the situation, Ayala Land does not expect to spend all of its P24.3-billion capital expenditure allotted for the year.
"For the nine months, Ayala Land spent a total of P12.2 billion for project and capital expenditure which represents half of the capex for this year," the company said.
Meanwhile, the Ayala group’s telecommunications unit, Globe Telecom, posted a 9% decrease in profits to P8.72 billion, driven by lower operating earnings partially offset by lower financing costs. The country’s second largest phone company reported a 1% decline in revenues at P46.6 billion for January to September on weaker phone usage. — K.J.R. Liu
