Ayala Corporation, the country’s oldest and largest conglomerate, suffered a 79% drop in its earnings in the 1st half of 2020. Despite this, the Zobel family’s empire still sees opportunities ahead.

Net income plunged to P7.9 billion from P37.8 billion last year, mainly due to the pandemic’s impact on its banking and real estate businesses. 

The Ayala group has tapped the domestic and international capital markets during the crisis, with Ayala Land and Bank of the Philippine Islands (BPI) raising $1.2 billion in the first half of the year. The group has also accessed an additional $1.8 billion from various capital raising activities.

“Our group has taken advantage of the favorable debt market conditions to further solidify our balance sheet in these challenging times. Ayala Land, BPI, Globe, and Manila Water are expected to raise US$3 billion in combined proceeds from various domestic and international capital raising exercises,” said Ayala chairman and chief executive officer Jaime Augusto Zobel de Ayala.

“While the health crisis has stifled the momentum of some of our businesses, we have started to see positive trends in the operations of BPI, Globe, and Ayala Land since the easing of quarantine restrictions in June,” said Ayala President and COO Fernando Zobel de Ayala. 

He noted that the pandemic has accelerated the country’s digital adoption, particularly in financial services. 

Here is a snapshot of the performance of its core businesses for the first 6 months of 2020:

Ayala Land

Net income: Down 70% to P4.5 billion owing to lower project bookings, suspended construction activity, restricted mall operations, and closure of resorts.

Revenues: Down 50%

BPI

Net income: Down 15% to P11.7 billion, as it booked P15 billion in loan loss buffers.

Revenues: Up 15% to P52.7 billion on the back of net interest income and non-interest income growth.

Non-performing loan ration stood at 1.83%.

Globe

Net income: Down 5% to P11.5 billion on higher depreciation expenses from continued network investments

Service revenues: Down 1% to P72.4 billion

AC Energy

Net income: Down 80.6% to P4.5 billion from P23.2 billion

However, its listed company, AC Energy Philippines, registered positive earnings of P1.96 billion, a significant turnaround from the P552 million loss in the 1st half of last year.

Manila Water

Net income: Down 15% to P2.5 billion, as higher contributions from the concession area in Metro Manila were weighed down by less gains from businesses outside the capital.

Revenues: Up 3% to P10.9 billion on the back of higher billed volume in Metro Manila.

AC Industrials

Net loss of P1.8 billion, as global manufacturing and automotive space were significantly impacted by the pandemic,

IMI recorded a net loss of $21.5 million, while AC Motors lost P575 million. – Rappler.com