Ayala turnaround gains traction
Ayala Corp.’s efforts to cut losses and tighten capital spending are gaining traction, with improving results from its newer businesses strengthening its turnaround prospects, according to conglomerate analyst Klark Gaba.
In a research note, Gaba said changes under president and CEO Cezar “Bong” Consing had eliminated P3 billion in recurring portfolio losses through the disposal of nonperforming assets.
Since taking the helm in late 2022, Consing has also brought in operating partners for AC Health and AC Logistics, reduced parent company headcount by 50 and raised P20 billion in fresh equity through Mitsubishi Corp’s investment.
AC Health, AC Logistics and AC Mobility remain unprofitable, but narrowing losses and operational changes point to improving prospects, Gaba said.
AC Logistics’ net loss narrowed to P167 million in the first half of 2026, with its net margin improving to negative 8 percent.
The subsidiary recorded a P1.9-billion loss and a negative 48-percent margin for full-year 2025.
At AC Health, provider group revenues grew by 32 percent as patient volumes and average spending increased.
Professional fees included in revenues nearly doubled to P700 million, which Gaba viewed as an indication of greater physician activity.
Expansion-related costs, however, weighed on profitability.
AC Mobility sold 25,048 vehicles across its brands in the first half, up 25 percent year-on-year, supported by its BYD partnership.
The peso’s weakness pressured margins, although its negative margin narrowed to 0.18 percent from 1.49 percent in 2024.
Gaba said the charging station rollout should support longer-term profitability.
Ayala has also moderated capital infusions. Annual investments averaged P17.8 billion in 2023 to 2025, down from P18.6 billion in 2018 to 2022.
Capital infusions as a proportion of dividends received fell to 91 percent from 123 percent across the same periods, reflecting a more disciplined allocation of resources, Gaba said.
A dedicated portfolio management team now assesses businesses against their cost of capital, operating targets and return measures, including return on equity, return on invested capital and total shareholder return.
Dividends paid to Ayala shareholders posted at a compound annual growth rate of 12 percent from 2023 to 2025.
