Ayala Corporation's Q12024 Core Net Income Up 26% to P12 Billion

Excluding one-time factors, Ayala Corporation's (Ayala) core net income increased 26% to P11.8 billion, maintaining its growth trend. The growth was facilitated by the ongoing success of Ayala's main businesses, ACEN, Globe, BPI, and Ayala Land. Taking one-time factors into account, Ayala's net income increased by 28% to P13 billion.

Surpassing higher operating expenses and provisions, robust revenue growth allowed BPI to increase its net income by 26% to P15.3 billion. The bank's quarterly profit set a new record with this one.

Ayala Land's strong earnings increase in the first quarter of the year was supported by robust consumer activity and high real estate demand. 39% more net income, or P6.3 billion, was made.

Consolidated net income for ACEN increased by 34% to P2.7 billion. The gain is the result of a 49% rise in the amount of energy that can be attributed to renewables, reaching 1,580 gigawatt hours, and a stronger net selling position in the wholesale electricity spot market.

As a result of ACEN's increased contributions, better net financing income, and forex gains, parent company AC Energy & Infrastructure (ACEIC) saw a 34% increase in core earnings to P3.1 billion. Its decrease in earnings from thermal assets restrained the increase. A portion of the proceeds from the sale of The Blue Circle went to ACEIC, increasing its net income to P3.2 billion, or 20% more than before one-time items.

The tower sale and increased depreciation costs were the primary causes of Globe's 7% drop in net income to P6.8 billion. Core net income increased by 13% to P5.8 billion, driven by a 4% increase in EBITDA to an all-time high of P21.4 billion and a 3% increase in gross service revenues to P41.1 billion.

“We are seeing growth momentum across most of our businesses. This speaks to the resilience of the economy and our ability to provide products and services that are valued by customers.”, Ayala President and CEO Cezar P. Consing said.
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Across all of its pillars, AC Health is still growing. Revenues increased by 14% to P2.2 billion, and EBITDA increased by 36% to P127 million when ramp-up expenditures for the new cancer hospital and Konsulta MD were taken out.

700 patients have been treated by the new cancer care facility in Arca South since it opened in November 2023.

Losses at AC Industrials decreased from P980 million to P931 million. P670 million of the overall losses were attributable to Via Optronics' impairment reserve. With contingencies excluded, normalized losses decreased to P243 million from P270 million as a result of Merlin Solar's smaller losses and the absence of MTC-Con's P154 million loss from the same period the previous year. 

IMI's sales decreased by 16%, in part due to the divestiture of STI, which generated money during the same time last year. Losses increased to US$3.7 million as the end-consumer markets of its industrial clients remained lackluster. Louis Hughes was named IMI's Chief Executive Officer, with effect from May 1, 2024. In order to increase competitiveness and bring overall margins closer to industry standards, the IMI leadership team is currently working on strategic initiatives. 
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By 2030, AC Mobility hopes to be the top platform for EVs and other new energy cars in the Philippines. There are now 1 hybrid electric vehicle and 5 battery electric vehicle models in its lineup. By the first half of this year, it will be spread throughout 25 Ayala Land venues across the country, with 50 charging stations.

Balance Sheet Highlights

• Ayala continues to maintain a strong balance sheet with sufficient liquidity and low cost of debt.
• Consolidated cash stood at P70.0 billion.
• Consolidated net debt increased 4% to P527.1 billion. 
• Consolidated net debt-to-equity ratio increased one hundred basis points to 0.76x, well within the  Company’s covenant of 3.0x.
• Parent level cash was up 6% to P12.5 billion.
• Parent net debt increased 7% to P155.9 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 12.4%
• Parent net debt-to-equity ratio increased six hundred basis points to 1.02 mainly due to capital expenditure financing requirements.
• Parent average cost of debt remained at 5.4% which is below the 5-year benchmark of 6.0 percent.