By James A. Loyola
Ayala Corporation is boosting capital expenditures after it recorded a 16 percent growth in net income to P30.3 billion last year on the back of the double-digit growth of its real estate and power businesses.
In a disclosure to the Philippine Stock Exchange, the firm said the positive results were buoyed by strong equity earnings contributions from Ayala’s business units, which rose 12 percent to P35.8 billion. This was led by Ayala Land and AC Energy, whose equity earnings contributions expanded 21 percent and 30 percent, respectively.
“We are happy to see this earnings momentum sustained for the sixth consecutive year as the expansion strategy across our portfolio of businesses continues to bear fruit,” Ayala Corporation President Fernando Zobel de Ayala said.
Zobel added that, “consistent double-digit growth since 2012 has translated to a compounded annual growth rate of 22 percent. We remain positive about our trajectory as we move closer to our 2020 goals.”
The Ayala group is increasing its capital expenditures this year by 44 percent to P249 billion, largely to support the parent company’s own investment program as well as the growth strategies of Ayala Land, Globe Telecom, and Manila Water. At the parent level, Ayala has earmarked P51.8 billion in capital spending this year, primarily to fund its subscription to Bank of the Philippine Island’s stock rights offering and its investments in AC Energy, AC Industrials, AC Education, and AC Health.
AC Energy’s net earnings jumped 31 percent to P3.5 billion, driven by earnings from its geothermal platform and its wind energy assets. The resurgence of property sales combined with a solid leasing business drove Ayala Land’s 21 percent growth in net earnings to P25.3 billion while BPI recorded a net income of P22.4 billion.
Globe Telecom’s net earnings dropped five percent to P15.1 billion in 2017 due to higher operating expenses and depreciation charges as Manila Water posted a muted net income growth of one percent to P6.2 billion. AC Industrials registered a net income of P1.2 billion on better performance of both its electronics manufacturing and vehicle retail units.
AC Health continues to scale up its platforms in retail pharmacy and primary care. Generika, its retail network of affordable quality generic medicines, recorded P3.3 billion in revenues, up 15 percent from a year ago on higher retail sales and store expansion.