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Ayala Corp. net income flat; property business takes a hit

Posted on 09:27 PM, March 08, 2010 [ BusinessWorld Online ]

THE NET income of Ayala Corp., the country’s oldest conglomerate, barely increased last year as profits of property unit Ayala Land, Inc. took a dive amid a “sluggish economic environment.”

The listed holding firm led by the Zobel family told the stock exchange profits went up by 0.56% to P8.154 billion in 2009 from P8.108 billion in 2008.

In a statement, Ayala Corp. partly attributed this to lower capital gains from the sale of shares last year, but excluding this, profits grew by 34% due to the “strong performance” of major business units.

Fernando Zobel de Ayala, Ayala Corp. president and chief operating officer, said the 2009 results indicated a “position of financial strength amid a challenging environment.”

“Our efforts the past few years to strengthen our balance sheet prepared us well for the economic downturn,” Mr. Zobel said in the statement.

Ayala Corp. said its share in the profits of its business units went up by 18% to P9.2 billion.

Profits of Ayala Land dropped by 16% to P4 billion, although the 2008 figure included a one-time gain from the sale of a lot. Excluding this sale, the decline in net income was only 2%.

“In real estate, Ayala Land’s residential sales recovered beginning the second quarter with take-up rates improving through the fourth quarter,” the statement said. Leasing revenues from shopping centers and office and business process outsourcing (BPO) spaces grew by 20%.

The Bank of the Philippine Islands, meanwhile, increased profits by a third to P8.5 billion last year as net interest income went up by 10% while other businesses grew by a quarter. “While corporate lending slowed, challenged by the high level of liquidity and the availability of funding through the capital markets, loans to [small firms], consumer market, and credit card customers remained robust, expanding at double-digit levels.”

The net income of telecommunication arm Globe Telecom, Inc. went up by 11% 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,” the firm said.

Broadband subscribers expanded three times to more than 715,000, while mobile subscribers reached 23.2 million by yearend.

Profits of Manila Water Co., Inc., which serves the east zone of Metro Manila, rose by 16% to P3.2 billion given an “expanded customer base, increased billed volume, and improved operating efficiency.”

Integrated Micro-electronics, Inc. reported a turnaround in 2009 with a $10-million net income, erasing the $16-million loss recorded in 2008.

BPO businesses led by LiveIt Solutions, Inc. recorded a net loss of $12 million due to acquisitions and debt.

“Ayala Corp. ended 2009 with cash of P30 billion and parent net debt to equity ratio of 0.04 to 1,” the company said.

Shares in Ayala Corp. went up by P7.50 to P300.00 each yesterday from P292.50 on Friday.


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