Ayala earnings dipped 5% in March quarter

Ayala Corp. posted a 5-percent decline in first-quarter net income as weaker contributions from its property and emerging businesses offset gains from banking, telecommunications and energy units.

The Zobel-led conglomerate said on Wednesday its profit settled at P12 billion in the January-to-March period from the previous year’s level. This was attributed to a high base effect that included a P1.7-billion dilution gain from Mitsubishi UFJ Financial Group’s investment in fintech platform Mynt.

Core net income, which excludes one-off items, was steady at P11.2 billion.

The company said stronger earnings from Bank of the Philippine Islands (BPI) and Globe Telecom Inc., as well as contributions from AC Energy & Infrastructure Corp., helped offset softer results from Ayala Land Inc. (ALI).

Ayala CEO Cezar Consing said the group’s immediate priority was maintaining resilience amid volatile global conditions.

“Given global macro conditions, our near-term focus is on resiliency through stronger cash generation, prudent cost management and disciplined capital allocation,” Consing said.

BPI remained Ayala’s largest earnings contributor after posting a 2-percent increase in net income to P16.9 billion, supported by strong loan and revenue growth.

Total loans expanded 14 percent to P2.6 trillion, while deposits grew 10 percent to P2.8 trillion.

Meanwhile, Globe’s core net income rose 9 percent to P4.9 billion on higher data-related revenues and stronger equity earnings from affiliates. However, reported net income declined 20 percent to P5.6 billion because of one-off gains booked last year and higher interest expenses.

ALI saw net income drop 23 percent to P5.4 billion as property development revenues weakened. Residential revenues declined 21 percent to P17.4 billion, while revenues from estate lots and office-for-sale projects fell 50 percent.

Still, leasing and hospitality revenues increased 9 percent to P12.6 billion, helped by stronger hotel operations and improved mall performance.

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Hotels and resorts revenues surged 30 percent following contributions from renovated properties and the newly acquired New World Makati hotel.

Power unit ACEN Corp. recorded a 27-percent decline in core net income to P1.4 billion due to higher depreciation and financing costs, although reported net income jumped 50 percent to P2.9 billion.

Ayala said its balance sheet remained “strong and resilient” despite market volatility. Consolidated cash stood at P71.9 billion, while consolidated net debt-to-equity ratio slightly rose to 0.81 times, still well below its covenant limit.

The conglomerate added that its loan-to-value ratio rose to 13.1 percent due to the impact of the Middle East conflict on market values of some assets.

Separately, AREIT Inc., the real estate investment of ALI, grew its first-quarter earnings by 25 percent to P2.6 billion as contributions from newly infused regional assets boosted recurring revenues.