Ayala Corporation Reported P36.7 Billion Core Net Income in 9M24, Up 19%

Ayala Corporation (Ayala) posted a core net income of P36.7 billion, a growth of 19 percent in the first nine months of 2024. The performance was anchored by the company’s core units, BPI, Ayala Land, Globe, and AC Energy & Infrastructure (ACEIC). Including one-off items, Ayala’s reported net income increased five percent to P34 billion.

Highlights

BPI posted a record-high P48 billion in reported net income, up 24 percent due to sustained growth in loans, fee income, and net interest margin (NIM) expansion.

Ayala Land’s reported net income grew 15 percent to P21.2 billion on resilient residential demand and consumer activity.

Globe's core net income improved 19 percent to P17.6 billion as the company posted record service revenues complemented by lower expenses that led to EBITDA margin expansion. This was boosted by stronger contributions from Mynt, the operator of GCash. Net income including non-recurring gains, was up six percent to P20.6 billion.

ACEN's reported net income accelerated 24 percent to P8.1 billion, driven by higher attributable renewable energy generation, a strong net selling merchant position in the Philippine Wholesale Electricity Spot Market (WESM), and net value realization gains of ~P2.5 billion.

ACEIC, the parent company of ACEN, registered a core net income of P8.7 billion, up 21 percent as the strong performance of ACEN, growth in net financing income, and forex gains offset lower contributions from its thermal assets. Including one-off items, ACEIC's net income was flat at P10.2 billion.

“Ayala's growth is being sustained by the strong performances of our core businesses. We continue to manage our younger businesses to get them to sustainable trajectories in the near-term. We strive to build a simpler, more collaborative and more connected Ayala.,” Ayala President & CEO Cezar P. Consing said. 

Portfolio Updates

AC Health’s revenues grew 11 percent to P6.9 billion. The provider group, which is comprised of clinics and hospitals, saw a revenue growth of 25 percent, above industry growth of 12 percent. The pharma group, made up of retail and principal operations, registered a one percent revenue growth against an industry decline of four percent. Meanwhile, net loss widened to P417 million mainly due to costs related to the ramp up of the cancer hospital.

AC Industrials narrowed its net loss to P5.1 billion from P6.1 billion due to lower impairments. Core net loss, which excludes all one-off items, widened to P921 million from P808 million because of softer demand in IMI, higher costs from tax assessments, unfavorable forex, and start-up costs in ACMobility, as well as closure costs in the 2-wheel segment.

IMI continued to focus on navigating headwinds in the electronics market through various initiatives including rightsizing, which is estimated to reduce annual core fixed overhead and operating expenses by US$25 million. IMI’s revenues were down nine percent to US$841 million while net losses reached US$9.2 million.

ACMobility further bolstered its portfolio of passenger vehicles with the introduction of three battery electric vehicles at price points that complement those within its current lineup. The company launched in the past 2 months the mini hatchback BYD Seagull at P898,000, the performance sedan BYD Seal at P2.5 million, and the SUV Kia EV9 at P5.9 million. On the charging infrastructure side, over 80 additional charging points were rolled out in the last 12 months, bringing the company’s total to 111 charging points in 50 locations nationwide.

In October, Ayala, through its wholly owned subsidiary AC Ventures Holding Corp. (ACV), brought in Mitsubishi Corporation (Mitsubishi) as a strategic partner to accelerate the growth of Globe Fintech Innovation, Inc. (Mynt), the operator of the ubiquitous GCash. Aligned with Ayala’s strategy of supporting the growth of clear winners within its portfolio, the partnership aims to expand GCash’s product offerings and customer reach by leveraging Mitsubishi’s extensive global network and expertise in the fintech space. Subject to conditions precedent and regulatory approvals, Mitsubishi will subscribe to shares equivalent to a 50 percent stake in ACV.

Balance Sheet

• Ayala continues to maintain a strong balance sheet through active debt management and value realization initiatives. 
• Consolidated cash amounted to P72.7 billion.
• Consolidated net debt increased 12 percent to P562.9 billion.
• Consolidated net debt-to-equity ratio was slightly up three basis point to 0.78x, well within the Ayala’s covenant of 3.0x. 
• Parent level cash amounted to P6.9 billion. 
• Parent net debt totaled P168.4 billion.
• Parent net debt-to-equity ratio was at 1.03 and is estimated to adjust below 1.0 upon the completion of Mitsubishi’s forthcoming investment in Mynt, subject to PCC approval. 
• Loan-to-value ratio, the ratio of its parent net debt (excluding the fixed-for-life perpetuals which have no maturity) to the total value of its assets, ended at 12 percent.
• ​Parent average cost of debt ended at 5.47 percent.
• Ayala reissued P15 billion-worth of Preferred “B” Shares at 6.0538 percent. The issuance was well received by institutional and retail investors being 3 times oversubscribed. The proceeds will be used to refinance Ayala’s P15 billion Preferred Shares callable on November 9, 2024.