Ayala profit falls as Covid squeezes margins | Bilyonaryo Business News

Ayala profit falls as Covid squeezes margins

Conglomerate Ayala Corp. reported a 19.5 percent drop in profit in the first quarter to P5.37 billion , weighed down by lower earnings from its real estate and banking businesses.

Revenues were flat at P60.19 billion as most of its businesses continued to grapple with the effects of the pandemic.

Core earnings decreased by nine percent to ₱7.2billion.

Property arm Ayala Land Inc. saw a 36 percent decline in profit to P2.8 billion, largely due to disruptions caused by the virus outbreak.

Earnings of Bank of the Philippines Islands also fell 22 percent to P5 billion as a result of one-time tax adjustments in connection with previously booked loan provisions following the retroactive implementation of the CREATE law.

Manila Water likewise posted lower earnings during the period, dropping by eight percent to P1.3 billion due to the combined effect of lower billed volume and lower supervision fees.

On the other hand, Globe and AC Energy grew their earnings double-digit.

AC Energy delivered a solid performance, chalking up a 24 percent growth in net income to ₱2.4 billion on the strong showing of its international and Philippine businesses as well as accounting adjustments.

The automotive business under AC Industrials trimmed its net loss to ₱200 million on the back of improved contributions across its global manufacturing businesses and local automotive operations.

As for its electronics business, Ayala’s IMI returned to profitability with a net income of $2.19 million as sales rebounded.

“The challenges and prospects brought about by the pandemic is an opportune time to recalibrate Ayala’s portfolio strategy. In the next three years, we aim to sharpen the components of our portfolio to optimize returns and further strengthen our balance sheet,” said company president Fernando Zobel de Ayala.

“We will place greater emphasis on portfolio strategy with a sharper focus on optimizing returns from existing businesses and a disciplined process on capital deployment. In parallel, we will actively explore opportunities for value realization to fund future investments,” he said.

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