Ayala Corporation’s Core Profit Up 48% to PHP 41 Billion in FY23

Ayala Corporation’s (Ayala) core net income, which excludes one-off items, reached a high water mark in 2023, increasing 48 percent to P41 billion. The strong performances of BPI, Ayala Land, and AC Energy anchored the Company’s results. Core net income was 32 percent higher than 2019, which was when the previous high water mark was established. Accounting for one-offs, Ayala’s net income grew 39 percent to P38.1 billion.

​FY23 vs FY22 Highlights

• BPI’s net income increased 44 percent to P51.7 billion due to strong loan growth, higher margins, and lower provisions. Including a gain from an asset sale in 2022, net income was up 31 percent.
• Ayala Land’s net income grew 32 percent to P24.5 billion as its property development and commercial leasing businesses continued to deliver strong results.
• ACEN’s income from operating units, which excludes cash value realization gains and other one-time, noncash adjustments, was up 2.9x to P4.9 billion on the back of new operating capacity and a strengthened net seller position. Inclusive of one-offs, ACEN’s net income decreased from P13.1 billion to P7.4 billion mainly due to the remeasurement gain from the acquisition of the Australia platform in 2022. This was partly offset by the value realization and remeasurement gains from the sale of a small stake in the Salak and Darajat plant in Indonesia in 2023.

AC Energy & Infrastructure (ACEIC), the parent company of ACEN, saw its core earnings jump 71 percent to P9.5 billion from improved operating earnings from ACEN and higher contributions from GN Power Dinginin. Including one-off items, ACEIC’s net income increased 2.7x to P12.6 billion due to divestment gains in ACEN and GN Power Kauswagan in 2023 and the write-off from the divestment of SLTEC in 2022.

• Globe’s net income dropped 29 percent to P24.6 billion mainly due to the one-time gain from the partial sale of its data center business in 2022. Gross service revenues and EBITDA grew three percent to P162 billion and P81 billion, respectively, both all-time highs. Core net income was flat at P18.9 billion

“We succeeded in getting aggregate core earnings to exceed the pre-pandemic high. Now we focus on getting better operating and financial results from each of our businesses, and on rationalizing the portfolio where it makes sense to do so.”, Ayala President and CEO Cezar P. Consing said.

• Ayala’s group CAPEX reached P247.7 billion, 12 percent lower mainly due to the tapering CAPEX of Globe.

Parent CAPEX decreased 55 percent to P13.2 billion, mainly due to Ayala’s purchase of Ayala Land shares and participation in Globe’s Stock Rights Offering, which both happened in 2022.

• AC Health continues to progress in scaling its healthcare ecosystem. Acquisitions have bolstered growth however net income remains slightly negative due to one-offs and higher manpower and marketing expenses.

a. AC Health acquired a significant minority stake in St. Joseph Drug. The acquisition enables AC Health to strengthen its pharmacy footprint and reach more Filipinos throughout the country.

b. AC Health entered into an agreement with the Far Eastern University-Dr. Nicanor Reyes Medical Foundation to manage the university’s 300-bed hospital in Quezon City.

• In AC Industrials, losses excluding one-offs narrowed to P1.2 billion from P1.7 billion on the back of better results from IMI’s core operations and AC Motor’s 4-wheel business. The divestments of MT C-con and STI Enterprises led to impairment provisions that widened losses to P7.3 billion from P1.7 billion.

a. IMI saw higher earnings from its core business as margins improved and component shortages eased. 

b. Previously AC Motors, ACMobility ventured into the electric vehicle space and has begun to distribute BYD and Kia electric vehicles. It is utilizing the group’s ecosystem, particularly ALI, IMI and Globe, to build out infrastructure that is supportive of an EV push.

c. ACMobility’s 4-wheel business registered higher core earnings on better results from Kia, Honda, and Isuzu. Its 2-wheel business posted wider losses due to weaker demand and write-downs on aging inventory.

Balance Sheet Highlights
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• Ayala continues to maintain a strong balance sheet with sufficient liquidity and low cost of debt.  Consolidated cash stood at P76.2 billion.
• Consolidated net debt increased eight percent to P513.6 billion.
• Consolidated net debt-to-equity ratio decreased four basis points to 0.76, well within the Company’s covenant of 3.0x.
• Parent level cash was up five percent to P11.7 billion.
• Parent net debt dipped two percent to P146.1 billion.
• 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, stood at 11.2 percent.