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AYALA
Corp. (AC), the country’s oldest conglomerate, posted a
record P16.2 billion in net profit last year, up 33
percent from 2006.
Gains
came from selling shares, lower-financing expenses and
stable equity earnings from operating units.
The
gains drove consolidated revenues to P78.71 billion,
from P70.17 billion in the same comparable period.
“The
much improved business environment over the past two
years has given us the opportunity to unlock values from
the investments we initiated over the past decade,
especially as market values reached attractive levels
for value realization,” said president and chief
operating officer Fernando Zobel de Ayala.
AC said
companies under AC Capital contributed P1.4 billion in
equity earnings, down 42 percent from 2006.
“Although Manila Water, Integrated Microelectronics
Inc., and Ayala Automotive continued to contribute solid
profits, equity earnings were lower due to losses
related to the start up costs and capacity investments
made in support of growth programs of the newer Business
Process Outsourcing (BPO) and shared services
companies,” the company in a statement Thursday.
While
top line revenue growth was strong through the various
member firms of the conglomerate, investments in new
facilities in support of growth for 2007 and 2008, as
well as higher costs due to the continued strength of
the peso and the Indian rupee, weighed down earnings
last year.
“A
significant improvement is expected in 2008, however, as
continued strong revenue growth drives higher capacity
utilization and margin expansion, and eTelecare’s
profits are equitized for a full year as a result of an
increase in Ayala’s shareholding to over 20-percent late
last year,” the company said.
Paired
with stable equity earnings, Ayala also booked P7.3
billion in capital gains from its value realization
initiatives, 55-percent higher than the P4.7 billion in
capital gains from 2006. These came from sale of shares
in Bank of the Philippine Islands (BPI), Ayala Land and
Globe. If these gains were excluded, the company would
still rack up a 19-percent gain in net income for the
period in review.
Lower-financing expense that dropped 26 percent to P3
billion further improved company earnings. The company
also prepaid P14 billion in debt and reduced
average-funding cost. Net debt as of year-end was down
to P13.5 billion with net debt-to-equity ratio at 0.15
to 1.
AC holds
interest in the banking, property development,
telecommunications, BPO, electronics manufacturing,
water distribution and automotive businesses.
Its
major operating units,
Ayala Land,
BPI and Globe recently reported double-digit growth in
net income for 2007.
The
financial results of companies under AC Capital,
however, was mixed. Collectively, the operating units
generated equity earnings of P11.8 billion in 2007, from
P12.1 billion in 2006.
AC is
allotting close to P56 billion in consolidated capital
expenditures this year to pursue value-enhancing growth
initiatives. This is nearly double the level of capital
expenditure in 2007 and the highest for the company in a
decade. |
