Month: April 2012

Two of the country’s largest conglomerates are joining forces to develop light rail projects in Metro Manila.

Ayala Corporation and Metro Pacific Investments Corporation signed today a memorandum of agreement to form an exclusive strategic partnership to jointly pursue and develop light rail projects in the greater Metro Manila area. Under the agreement, each of the parties will own a 50% interest in the light rail projects and related real estate development undertakings. The partnership is initially eyeing to bid for the light rail transit projects identified under the government’s Public Private Partnership program (PPP). However, it is also open to work together on other rail-related opportunities.

Ayala and MPIC are two of the largest conglomerates in the Philippines with a combined market capitalization of over 300 billion pesos. They each have a solid track record and experience in developing large-scale infrastructure projects. These two companies have proven their respective capabilities in delivering public utilities such as water infrastructure services and toll road operations and management. The combination of their experiences in these sectors, plus their individual expertise and capabilities in other areas, power distribution and healthcare in the case of MPIC, and large scale mixed-use real estate projects in the case of Ayala, create a unique and powerful alliance that can bring immense value as the country seeks to improve its light rail transit system.

According to Ayala Corporation Chairman and Chief Executive Officer, Jaime Augusto Zobel de Ayala, “We are glad to be partnering with the Metro Pacific Investments group for this specific purpose. We each have unique strengths and capabilities that, when combined, create a unique value proposition in rail development. We hope to contribute meaningfully in helping raise the standards of our public utilities. This is vital to our nation’s progress and competitiveness. Developing an efficient mass transit system is a huge endeavor which will be better served by the synergies created by this partnership.”

For his part, MPIC Chairman, Manuel V. Pangilinan said, “We are pleased to share a common ground with Ayala Corporation through the Light Rail Projects. This strategic alliance will create integrated solutions that will improve public transportation through our vision to transform the country’s light rail transit system into a network very much like those in Hong Kong, Singapore, Kuala Lumpur and Osaka.”

“The existing system is over capacity and under invested – the need to improve the existing rail systems now cannot be overemphasized. Our initiative to join hands in addressing these concerns, signifies our commitment to help Filipinos become more productive and to contribute to the country’s overall infrastructure development and economic growth. ” Mr. Pangilinan said in closing.

This is not the first time Ayala and MPIC forged an alliance. Both companies also combined forces in the bid for the Angat water project in March 2010.

Ayala Corporation’s consolidated audited net income for 2011 reached P9.4 billion on the back of strong recurring earnings growth posted by the core businesses in real estate, banking, and water as well as improvements in its international real estate business and BPO businesses.

The Ayala businesses’ growth momentum has been very positive. They remain dominant in their respective industries despite intense market competition. The growth trajectory of Ayala’s businesses is expected to continue as it aggressively expands its products and services to a broader market base.

For this year, the Ayala group has allotted P91 billion for capital expenditures, 38% higher compared to capital expenditures last year. The bulk of this year’s allotment is for real estate development, network improvement in its telecom unit, and acquisitions as well as investments in its water business.

The company is also expanding into new businesses, particularly in power generation and transport infrastructure. Last year, Ayala committed capital of close to P7B for the development of projects in solar, wind, hydro, and thermal power generation, as well as for the construction of a four-lane 4-kilometer road that will link Daang Hari road in Cavite to the South Luzon Expressway under the first public-private partnership (PPP) project of the Aquino government.

Ayala looks to continue with its development works and progress in its pipeline of projects in both conventional and renewable energy sources. It is also actively monitoring opportunities under the government’s PPP program that are expected to be rolled-out this year, particularly rail, road, and airport-related projects.

Ayala’s share price has risen by 37% year-to-date to P424.80 per share as of the close of trade April 19, 2012, outperforming the Philippine Stock Exchange composite index which rose by 18% over the same period.

Press statement on the occasion of Ayala’s Annual Stockholders’ Meeting held today, April 20, 2012 at InterContinental Manila.