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The Ayala Group’s contributions to the UN Sustainable Development Goals were given focus at the Nordic Ambassadors’ Luncheon in Shangri-la Fort held last October 26, 2017.  TG Limcaoco represented Ayala Group’s Chairman and CEO, Jaime Augusto Zobel de Ayala (JAZA) at the event. With the Nordic countries at the forefront of the campaign in achieving the targets of the SDGs, Ayala presented how it makes a difference in the local arena and how it supports the SDGs as a whole. 

Ayala has aligned its strategies to the SDGs since the inception of the goals – a move that is proven to be significant and commendable given the strategies of other countries to push for the SDGs today. Congratulatory messages were further expressed by the Ambassadors for JAZA for being the first UN Global Compact SDG Pioneer in the Philippines and in Southeast Asia. 

The speakers expressed that Nordic countries give prime importance in Sustainability, and in the realization of certain targets: health, education, infrastructure development, climate change, job generation, and peace. These show an alignment with Ayala’s goals and core businesses. At the event, speakers stressed that companies with strong Sustainability efforts have a statistically higher chance for both profit and positive impact in the years to come. 

Other notable companies were given light at the event for their Sustainability efforts and strategies such as IKEA, H&M, and Spotify. Some of the Nordic countries also gave a glimpse of their upcoming efforts to further their campaign for a green economy and to further mitigate climate change by 2040. Despite bagging the top four ranks in the index of countries who promote the SDGs, the Nordic countries stressed that they continue to seek more ways to enhance their contribution and efforts. However, there is one point highlighted by Denmark Ambassador Jan Top Christensen: “Without peace, there cannot be development”, and so, the Filipino community was congratulated for the end of the war in Marawi. 

The companies present at the event were given the inspiration to continue their businesses with the SDGs in mind. Positive development is seen in the Philippines but more can be done, and the role of the private sector is very significant. As stated by TG Limcaoco, “We cannot discount the relevance of the private sector, and collaborative efforts with other sectors is key.” 

With this in mind, Ayala will carry on with its goal of contributing significantly to the SDGs, not because of compliance, but because of the company’s inner drive to make a difference and improve lives. 

APEC Schools, in partnership with Accenture Philippines, is running the Hour of Code^TM Program for all Grade 7 students across its APEC Schools branches. Together with volunteers from Accenture Philippines, APEC will be organizing computer-coding sessions where every student will be learning the fundamentals of computer programming to help them prepare and succeed in future academic pursuits and employment.

To strengthen the initiative, APEC is collaborating with Accenture to share its technology knowledge and expertise. As a strong advocate of adoption of STEM (Science, Technology, Engineering and Mathematics) education among today’s youth, Accenture has been supporting Hour of Code activities in the country since 2015. Globally, it has conducted Hour of Code activities in close to 200 cities around the globe. APEC will be conducting An Hour of Code sessions that will cover more than 3,000 Grade 7 students from all APEC Schools Branches by the end of this school year.

Under the program, the one-hour introduction to computer science is designed to demystify “code” and provide a fun way of learning computer programming basics. The program aims to foster interest and broaden participation in the field of computer science. It has since become a worldwide effort to celebrate computer science, starting with 1-hour coding activities but expanding to various community efforts.

With the pervasiveness of technology, students’ ability to succeed in any chosen field will increasingly depend on understanding how technology works. At APEC Schools, the use of technology is deeply integrated into the teaching and learning process. Learning with and about technology develops the students’ problem-solving skills, logic, and creativity. It also provides the foundation for success in any 21st-century career path.

Operated by AC Education, an Ayala company, APEC Schools is the largest private, non-sectarian chain of high schools in the Philippines. It aims to transform millions of lives by providing high-quality yet affordable education and by producing graduates that are ready for college and professional employment.

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* APEC Schools is operated by AC Education, an Ayala company and presently has 16,200 high school students across 23 branches in the NCR, Cavite, Rizal, and Batangas.

** Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions – underpinned by the world’s largest delivery network – Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With more than 375,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com.

***The ‘Hour of Code™’ is a global initiative by Computer Science Education Week[csedweek.org] and Code.org[code.org] to introduce millions of students in 180+ countries to one hour of computer science and computer programming.

Forbes Global 2000, an annual ranking of the top 2,000 public companies in the world by Forbes Magazine, ranked Ayala top 18 in its first-ever list of the World’s Best Employers in 2017. The news sparked pride among #AyalaCitizens. Among those at the top of the list were Google’s parent company, Alphabet; Microsoft; the Japan Exchange Group; and Apple. 
More than 36,000 global recommendations were analyzed by business intelligence portal, Statista, for Forbes magazine to come up with the World’s Best Employers list. Companies were evaluated based on internal and public perceptions of employees. The 500 companies receiving the highest total scores were awarded with the World’s Best Employers title.

See the full list here

Chairman and CEO Jaime Augusto Zobel de Ayala took the lead in Ayala Corporation’s group-wide effort to adopt a more imaginative approach to building sustainable businesses by creating platforms where social issues are made central to business strategy, guided by the UN’s 17 Sustainable Development Goals, of SDGs.

His leadership did not go unnoticed.

The UN Global Compact, a gathering of 800 global UN, business, government and civil society leaders, recognized Ayala Corporation’s sustainability strategy by distinguishing Mr. Zobel as an SDG Pioneer. The first SDG Pioneer from the Philippines, Mr. Zobel is one of ten individuals from around the world recognized for championing sustainability through their own companies and mobilizing the broader business community to take action in pursuit of the 17 UN SDGs.

Hundreds of nominations were received from diverse regions of the world, from which 10 finalists were selected, exemplifying how business can be a force for good in addressing the challenges we face as a global society.

“Each of the 2017 SDG Pioneers is exhibiting how companies and pioneering individuals can be a force for positive change in addressing the issues we all face today,” said Lise Kingo, UN Global Compact CEO and Executive Director. “Mr. Zobel has been impactful in reaching a wider segment of the business market through innovation and diversification. He has been a Pioneer in the inclusion of long-term sustainability in business strategy and operations.”

It was Mr. Zobel’s leadership that drove Ayala to embrace shared value creation, to better integrate the developmental challenges that society faces into Ayala’s strategies and business models. Apart from reinventing its business models to meet the needs of a wider segment of the population, Ayala has entered sectors critical to national development and inclusive progress: power, infrastructure, healthcare, and education.

Sustainability now plays a significant role in the Ayala businesses. Ayala Corporation drove the shift to the integrated reporting framework, which captures in detail the group’s positive impact on society through its contribution to the SDGs. Ayala Corporation is the first company in the Philippines to produce an integrated report. Another milestone is underway, as Ayala moves to include long-term sustainability targets for its businesses—which will form part of the companies’ and management’s key result areas.

 “I believe that now, more than ever, a deeper engagement with society is indispensable to the survival and success of private enterprises. From both a practical and moral standpoint, businesses cannot thrive in an environment rife with economic inequity,” said Mr. Zobel. “Ignoring these issues threatens our ability to create long-term value and jeopardizes the sustainability of the enterprise and markets.”

The world’s largest corporate sustainability initiative, the UN Global Compact calls on companies to align strategies and operations with universal principles on human rights, labour, environment and anti-corruption, and take actions that advance societal goals. In the Philippines, over 20 companies and non-business organization have joined the initiative, and the Global Compact Network Philippines has supported their efforts to advance sustainable business practices since 2016.

Mr. Zobel’s recognition as SDG Pioneer reinforces Ayala Corporation’s commitment to shared value creation, enhancing its business strategies and models in a way that addresses the evolving needs of Philippine society.

Jaime Augusto Zobel de Ayala recognized for work in sustainable business strategy and operations.

NEW YORK, 14 September 2017 – Ayala Corporation’s sustainability strategy has been recognized by the UN Global Compact, which named Ayala Chairman and CEO Jaime Augusto Zobel de Ayala as one of the United Nations SDG Pioneers. The first SDG Pioneer from the Philippines, Mr. Zobel is one of ten individuals from around the world recognized for championing sustainability through their own companies and mobilizing the broader business community to take action in pursuit of the 17 Sustainable Development Goals, or SDGs.

“Each of the 2017 SDG Pioneers is exhibiting how companies and pioneering individuals can be a force for positive change in addressing the issues we all face today,” said Lise Kingo, UN Global Compact CEO and Executive Director. “Mr. Zobel has been impactful in reaching a wider segment of the business market through innovation and diversification. He has been a Pioneer in the inclusion of long-term sustainability in business strategy and operations.”

His leadership drove Ayala to embrace shared value creation, to better integrate the developmental challenges that society faces into Ayala’s strategies and business models. Apart from reinventing its business models to meet the needs of a wider segment of the population, Ayala has entered sectors critical to national development and inclusive progress: power, infrastructure, healthcare, and education.

Sustainability now plays a significant role in the Ayala businesses. Under Mr. Zobel’s leadership, Ayala Corporation drove the shift to the integrated reporting framework, which captures in detail the group’s positive impact on society through its contribution to the SDGs. Ayala Corporation is the first company in the Philippines to produce an integrated report. Another milestone is underway, as Ayala moves to include long-term sustainability targets for its businesses—which will form part of the companies’ and management’s key result areas.

Each year, the UN Global Compact celebrates a group of SDG Pioneers – business leaders doing an exceptional job of taking action to advance the Global Goals. Hundreds of nominations were received from diverse regions of the world, from which 10 finalists were selected, exemplifying how business can be a force for good in addressing the challenges we face as a global society. Each Pioneer will be recognized during the UN Global Compact Leaders Summit 2017 on 21 September in New York.

A Pioneers Selection Group, comprised of experts from the UN, academia, civil society and the private sector, ranked the nominees based on a set of criteria, resulting in the ten 2017 UN Global Compact SDG Pioneers. Access the list of 2017 SDG Pioneers.

“I believe that now, more than ever, a deeper engagement with society is indispensable to the survival and success of private enterprises. From both a practical and moral standpoint, businesses cannot thrive in an environment rife with economic inequity,” said Mr. Zobel. “Ignoring these issues threatens our ability to create long-term value and jeopardizes the sustainability of the enterprise and markets.”

The world’s largest corporate sustainability initiative, the UN Global Compact calls on companies to align strategies and operations with universal principles on human rights, labour, environment and anti-corruption, and take actions that advance societal goals. In the Philippines, over 20 companies and non-business organization have joined the initiative, and the Global Compact Network Philippines has supported their efforts to advance sustainable business practices since 2016.

The UN Global Compact Leaders Summit 2017 is a two-day gathering of the private sector, UN, Government and civil society to jump-start action to achieve the UN Sustainable Development Goals by 2030. Together, over 800 leaders from around the world are gathered in New York to identify how to unleash the business activities, thinking and innovation required for a new era of sustainability.

About Ayala Corporation

Ayala Corporation is one of the largest conglomerates in the Philippines with businesses in real estate, financial services, telecommunications, water, electronics manufacturing services, automotive, power generation, transport infrastructure, education, and healthcare. Its corporate social responsibility arm, Ayala Foundation, has programs that focus on education, youth leadership, sustainable livelihood, and arts and culture. www.ayala.com.ph.

About Jaime Augusto Zobel de Ayala

Jaime Augusto Zobel de Ayala is chairman and CEO of Ayala Corporation, one of the largest conglomerates in the Philippines, with interests in real estate, banking, telecommunications, water, industrial technologies, power, infrastructure, healthcare, and education.

Jaime is a member of various business and socio-civic organizations, including the JP Morgan International Council and Mitsubishi Corporation International Advisory Council. He chairs the Harvard Business School Asia-Pacific Advisory Board and the SMU Advisory Council in the Philippines, as well as working with the Harvard Global Advisory Council, the University of Tokyo Global Advisory Board and the Endeavor Philippines board of trustees. Jaime represented the Philippines on the Asia Pacific Economic Cooperation (APEC) Business Advisory Council from 2010 to 2015.

Jaime has received multiple recognitions for his public service and support of economic development in the Philippines, including the Presidential Medal of Merit, the Philippine Legion of Honor and the Order of Mabini.

For inquiries, contact:

Mia Bontol

Associate, Corporate Communications

Ayala Corporation

09175779582

bontol.mcu@ayala.com.ph

Ayala Corporation’s net income expanded nine percent in the first half of the year to P15.1 billion year-on-year, primarily driven by the solid contributions of its real estate and power generation businesses. Equity earnings amounted to P17.4 billion in the first semester, six percent higher from a year ago. This was underpinned by robust contributions from Ayala Land and AC Energy, which grew 17 percent and 64 percent, respectively.

In the second quarter, Ayala recorded a net income of P8.1 billion, up two percent from its year-ago level. The higher securities trading gains recognized by Bank of the Philippine Islands in the previous year tempered Ayala’s net earnings during the period.

“We are pleased with the overall strong performance of our businesses. The active portfolio management, new business initiatives, and financial discipline we employed in recent years—supported by a healthy domestic economy—continue to bolster Ayala’s growth trajectory,” Ayala President and Chief Operating Officer Fernando Zobel de Ayala said.

Real Estate

Ayala Land sustained its growth trajectory in the first semester, recording P11.5 billion in net income, an 18 percent-jump from a year ago on the continued expansion of its property development and commercial leasing businesses.

Revenues from Ayala Land’s property development business rose 32 percent to P44.3 billion, mainly driven by strong performance across its residential, office for sale, and commercial and industrial lots sales segments. Residential revenues jumped 27 percent to P36.8 billion on new bookings and project completions across all residential brands. Reservation sales expanded 11 percent year-on-year to P61.4 billion. In the second quarter alone, reservation sales reached a record P34.1 billion, up 12 percent from its year-ago level. Meanwhile, booked sales soared 22 percent from a year ago to P40.5 billion. In the first semester, Ayala Land launched P31.9 billion worth of residential and office for sale projects.

In the office for sale segment, revenues expanded 36 percent to P4.2 billion driven by bookings from the High Street South Corporation Plaza 2 project. Revenues from commercial and industrial lot sales surged more than twofold to P3.3 billion backed by lot sales in Arca South, Vermosa, and Naic.
In commercial leasing, mall leasing revenues rose 12 percent from its year-ago level to P7.9 billion lifted by the contributions of new malls including The 30th, Tutuban Center, and UP Town Center. Revenues from office leasing climbed to P2.9 billion, 14 percent higher year-on-year buoyed by contributions of newly opened offices such as the UP Town Center, UP Technohub Building P, and the Ayala Center Cebu Corporate Center. Moreover, hotels and resorts revenues improved six percent to P3.4 billion on higher occupancy and average room rates at El Nido Resorts. In addition, Ayala Land’s property management revenues grew 12 percent to P816 million driven by an increase in managed properties and higher carpark volume. Altogether, Ayala Land’s recurring income business contributed 36 percent of its net income in the first half of the year.

Banking

Continued investments to ramp up its digitization strategy coupled with lower securities trading gains tempered Bank of the Philippine Islands’ net income in the first semester to P11.7 billion, eight percent lower from its year-ago level.

Revenues ended flat at P35.3 billion as the solid growth in BPI’s core banking business balanced out a lower non-interest income. The bank posted P23.5 billion net interest income, 14 percent higher year-on-year on the back of higher asset yields and an improved loan-to-deposit ratio. Non-interest income dropped 18 percent to P11.8 billion owing to a slowdown in securities trading. The decline was partly tempered by BPI’s fee-based business, which grew 18 percent from the previous year, driven by cards and payments, service charges, and investment banking.

BPI’s loan book expanded 17 percent to P1.1 trillion, driven by corporate loans, which accounted for 79 percent of the bank’s loan portfolio in the first semester. The bank continues to improve its asset quality with gross 90-day non-performing loans ratio at 1.5 percent from 1.6 percent in the previous year, while reserve cover stood at 126 percent during the period. Total deposits grew eight percent to P1.4 trillion. The bank’s current and savings accounts ratio stood at 73 percent.

As part of its commitment to widen its reach to underbanked and underserved Filipinos, BPI relaunched in July its microfinance arm, BPI Direct BanKo to service the needs of self-employed micro-entrepreneurs (SEMEs). BPI Direct BanKo currently operates 24 branches and micro-banking offices (MBOs) with a target to open 100 new branches and MBOs by year end.

Telecom

Globe Telecom sustained its topline growth on robust demand for data-related services across its product segments, with revenues expanding five percent to P62.9 billion in the first half of 2017.

Mobile revenues rose five percent to P48.3 billion, lifted by strong demand for mobile services. Mobile data revenues jumped 13 percent as mobile data traffic surged 85 percent to 280 petabytes during the period. Meanwhile, mobile subscribers dipped three percent to 59.7 million in the first semester as a result of Globe’s shift in reporting prepaid subscribers who do not reload 120 days to 90 days of inactivity, which started in the first quarter of 2017.

Meanwhile, home broadband revenues grew eight percent to P7.7 billion, in step with a higher home broadband subscriber base which also improved eight percent to 1.2 million. In the first semester, data-related services accounted for 53 percent of Globe’s total revenues.

Higher depreciation, interest expense, and costs related to the acquisition of San Miguel’s telecom assets weighed down on Globe’s net earnings, which dropped 10 percent to P8.1 billion in the first half of the year. Excluding costs related to the San Miguel deal, net earnings would only be four percent lower.

Globe ended the first half of the year with earnings before interest, taxes, depreciation, and amortization (EBITDA) of P27.3 billion, six percent higher from a year ago. Globe’s EBITDA margin improved to 43.3 percent from 42.8 percent in the previous year.

In its drive to continue improving customer connectivity and increase data traffic, Globe in the second quarter rolled out more than 1,100 cell sites that utilize the LTE frequencies acquired from the San Miguel deal. It also deployed close to 150,000 broadband lines in the same period.

Water

The steady performance of its Manila Concession coupled with increasing contributions from its domestic subsidiaries drove the three percent increase in Manila Water’s net income to P3.2 billion in the first half of the year. Revenues rose four percent to P9.1 billion buoyed by the continued expansion of its businesses outside Metro Manila.

Manila Water’s domestic business, Manila Water Philippine Ventures, recorded an attributable net income of P306 million, up 20 percent from a year ago, on strong contributions from Laguna Water and Estate Water. Laguna Water’s net income rose 49 percent to P148 million, lifted by the expansion of coverage in Laguna province. Meanwhile, Estate Water’s net earnings jumped 69 percent to P122 million, backed by increased connections and billed volume growth. Net income from Manila Water’s non-Manila concession businesses reached P584 million, representing 18 percent of Manila Water’s consolidated net income from 15 percent during the previous year.

The Manila Concession booked a three percent increase in net income to P3 billion driven by a one percent-improvement in billed volume resulting from sustained demand of commercial customers. Operational efficiency in the Manila Concession remained strong, with non-revenue water ratio at 12.8 percent and collection efficiency at 99 percent.

On a consolidated basis, Manila Water’s billed volume rose three percent to 366.9 million cubic meters in the first half of the year.

In June, Manila Water acquired additional shares of Saigon Water Infrastructure Corporation (“SII”), bringing its total ownership of the company to 37.99 percent. The transaction is in line with Manila Water’s investment strategy in Vietnam and in Asia.

Industrial Technologies

AC Industrials registered a net income of P739 million in the first half of the year, three percent lower from the previous year, as the lower contributions of its vehicle retail business tempered the gains from the robust performance of its electronics manufacturing arm.

Its electronics manufacturing unit, Integrated Micro-Electronics, Inc. (IMI), registered a net income growth of 14 percent to US$17 million, bolstered by its organic businesses in the Philippines, China and Mexico operations, as well as fresh contributions from newly acquired businesses. IMI’s total revenues grew 22 percent to US$501 million. Newly acquired businesses VIA Optronics and STI Enterprises Ltd. posted US$72.5 million in combined revenues, with one month contribution from STI.

AC Industrials’ vehicle retail business posted P14.7 billion in revenues, up 37 percent year-on-year, mainly driven by strong sales across all brands. However, this was offset by the lower dividend income from Isuzu Philippines Corporation, resulting in a 21 percent-decline in the net income of AC Industrials’ vehicle retail segment to P319 million.

In July, AC Industrials acquired MT Technologies GmbH, a German-based automotive supplier of models, tools, and plastic parts for automotive original equipment manufacturers (OEMs) and automobile tier 1 suppliers. In addition, its manufacturing facility for KTM motorcycles in Laguna commenced operations in June. These investments form part of AC Industrials’ strategy to increase its competence and capabilities in the automotive value chain and complement existing businesses in manufacturing services and vehicle retail.

Power Generation

In power generation, AC Energy’s net income surged 64 percent to P949 million in the first semester on the back of a favorable wind regime, improved efficiencies of its operating coal plants combined with feed-in-tariff earnings from its solar plant, as well as fresh contributions from Chevron’s geothermal assets in Indonesia.

AC Energy continues to pursue domestic and foreign expansion initiatives as it targets to double its attributable power generating capacity to 2,000 megawatts by 2020. In July, AC Energy entered into an agreement with UPC Renewables for the development of small island power projects in Indonesia.

Also in July, AC Energy, together with Star Energy, transferred 99 percent of its consortium interest in ACEHI-STAR Holdings to AllFirst Equity Holdings. ACEHI-STAR is the special purpose company that signed a share sale and purchase agreement with Chevron Philippines to acquire its geothermal assets, subject to certain conditions precedent.

Infrastructure

AC Infrastructure continues to improve efficiencies in its three public-private partnership projects. Light Rail Manila Corporation, the operator of LRT-1, averaged close to 430,000 in daily ridership in the first semester. Since taking over operations in 2015, it has increased the number of light rail vehicles by 35 percent to 104. Meanwhile, the Muntinlupa-Cavite Expressway is now serving nearly 28,000 vehicles per day, a 23 percent increase from its year-ago level. In addition, the Beep ticketing system now has nearly four million cards in circulation and has processed approximately P7.2 billion in transactions across rail, bus, and retail platforms since its release in 2015.

Social Infrastructure

In healthcare, AC Health continues to widen access to affordable medicine and primary healthcare services through Generika and FamilyDOC. In the first half of the year, Generika’s revenues reached P1.5 billion, up 10 percent year-on-year bolstered by higher retail and distribution sales across its branch network. As of the first half of 2017, Generika had a footprint of 698 branches nationwide. Meanwhile, FamilyDOC opened four new clinics in Las Pinas City, Imus, Cavite and Paranaque City. Since opening its pilot clinic in 2015, FamilyDOC has served over 30,000 unique patients as of July 2017 and has a branch network of 10 clinics in the southern Greater Manila Area. FamilyDOC aims to launch 14 more clinics this year.

In education, AC Education is completing enrollment for school year 2017-2018 in both APEC Schools and University of Nueva Caceres (UNC). As of end-July 2017, enrollment in APEC schools reached 16,200 enrollees, 54 percent higher year-on-year as it welcomes its first batch of Grade 10 Junior High School students and Grade 12 Senior High School students. APEC Schools is present in 23 sites across Metro Manila, Rizal, Cavite, and Batangas. Moreover, UNC increased its student population by five percent to 8,054 despite the absence of incoming freshmen in the second year of implementation of the K-12 law.

Balance Sheet

Ayala’s balance sheet remains at a comfortable level. Cash at the parent level amounted to P12.1 billion, while net debt stood at P64.4 billion. Net debt-to-equity ratio for the period was 0.67 at the consolidated level and 0.60 at the parent level. Ayala’s loan-to-value ratio or the ratio of its parent net debt to the total value of its investments was 9.8 percent in the first half of the year.

In line with Ayala’s prudent cash and debt management strategy, Ayala’s Board of Directors approved the filing of a three-year shelf registration with the Securities and Exchange Commission of up to P30 billion debt securities in one or more tranches. The shelf registration provides Ayala financial flexibility to issue debt instruments opportunistically as market permits.

Ayala Corporation’s net income expanded 20 percent in the first quarter of the year to P6.9 billion driven by the robust results of its banking and real estate businesses, as well as the solid earnings of its emerging businesses in power and industrial technologies.

Strong equity earnings from its businesses, which climbed 18 percent year-on-year to reach P8.5 billion, lifted the conglomerate’s performance during the period. This was led by equity earnings from the Bank of the Philippine Islands and Ayala Land, which expanded 27 percent and 18 percent, respectively. In addition, Ayala’s emerging businesses posted higher equity earnings, particularly AC Energy and AC Industrials, expanding 26 percent and 22 percent, respectively.

On a quarter-on-quarter basis, Ayala’s net income climbed 9 percent from the fourth quarter of 2016 on the back of the robust performance of its banking business.

“We are pleased to see our businesses sustain their positive performance in the first quarter. As a group, we continue to search for value-accretive opportunities not only to create new sources of financial growth, but also to remain relevant to our stakeholders. As our core businesses maintain their growth trajectories, we are encouraged by the progress of our emerging businesses. In particular, our power, infrastructure, and industrial technologies units are pursuing strategic opportunities to scale up and over time bring significant value to our portfolio,” Ayala President and Chief Operating Officer Fernando Zobel de Ayala said.

Real Estate

Ayala Land posted P5.6 billion in net income during the period, 18 percent higher year-on-year on the continued expansion of its property development and commercial leasing businesses.

Property development revenues jumped 21 percent to P19.7 billion, backed by the residential, office for sale, and commercial and industrial lots segments. Residential revenues grew 11 percent to P16.6 billion, supported by higher bookings and project completions across all residential brands. Bookings from Alveo’s Park Triangle Tower and Avida’s Capital House, both in Bonifacio Global City, as well as the Alveo Financial Tower in the Makati Central Business District, drove the 26 percent increase in office for sale revenues to P1.5 billion. Meanwhile, commercial and industrial lot revenues expanded tenfold to P1.6 billion, fueled by lot sales in Vermosa, Arca South, and Naic.

Mall and office leasing revenues continued to improve, reaching P7.1 billion, up nine percent from a year ago. Ayala Land booked P3.8 billion in mall leasing revenues during the period, a 12 percent increase year-on-year. This was driven by the contributions from newly opened malls, namely: The 30th in Pasig City, UP Town Center in Quezon City, South Park in Muntinlupa City, Ayala Malls in Legaspi, and the addition of Tutuban Center in Manila. Office leasing revenues rose eight percent to P1.5 billion on higher average rent in established offices and contributions from newly opened office spaces. Hotel and resorts revenues were stable at P1.7 billion, up four percent from a year ago.

In the first three months of the year, Ayala Land deployed P21.8 billion in capital expenditures. Of this amount, 46 percent was used for the completion of residential projects, while 37 percent was channeled into commercial leasing projects. The remaining amount was allocated for land acquisition and the developments of Ayala Land’s existing estates.

Banking

Bank of the Philippine Islands booked robust results in the first quarter of the year with net income surging 26 percent to P6.3 billion buoyed by the consistent performance of its core lending business. This was further boosted by its fee-based businesses and gains from securities trading and property sales.

BPI’s total revenues jumped 18 percent year-on-year to P18 billion. Net interest income expanded 15 percent to P11.5 billion, bolstered by higher asset yields and the growth of its loan portfolio. Non-interest income jumped 23 percent to P6.5 billion on securities trading gains, service charges, underwriting fees, and gains from asset sales.

Cognizant of customers’ evolving needs and preferences, BPI increased its investments in tools and processes to ensure greater convenience and security for customers amid an increasingly digital environment. The bank’s operating expenses during the period amounted to P8.7 billion, up 11 percent owing to additional manpower, regulatory costs, and spending on operational infrastructure. Despite higher operating expenses, BPI’s cost-to-income ratio improved to 48.6 percent compared to 51.4 percent during the same period last year. The bank ended the first quarter with return on assets of 1.5 percent and a return on equity of 15 percent, up 0.14 and 1.89 percentage points, respectively.

BPI’s loan portfolio expanded 20 percent year-on-year to P1.03 trillion. The bank maintains a healthy asset base with gross 90-day non-performing loans improving to 1.5 percent compared to its year ago level of 1.7 percent. Reserve cover grew to 123.7 percent from 114.2 percent in the same period last year. Total deposits stood at P1.4 trillion, up 11 percent, with low-cost deposits amounting to 73.9 percent of the full amount.

Telecom

The sustained momentum in data-related services across mobile data, home broadband, and corporate data segments drove Globe Telecom’s topline growth in the first three months of the year, which improved four percent to P31 billion. Mobile data revenues climbed eight percent to P10 billion, with this segment now representing 42 percent of total mobile revenues. Data-related services accounted for 53 percent of Globe’s total service revenues during the period.

Despite this improvement in revenues, the higher depreciation, interest expense, and costs related to the strategic acquisition of San Miguel’s telecom assets weighed on Globe’s net income, which declined 13 percent to P3.8 billion in the first quarter. Stripping off the impact of costs related to the acquisition of San Miguel’s telecom assets, Globe’s normalized net income declined by only four percent.

Globe’s earnings before interest, taxes, and depreciation slightly rose two percent to P13.3 billion as the increase in revenues was pared by higher operating expenses. EBITDA margin during the period stood at 43 percent, slightly lower from its year ago level. Globe booked P6.4 billion in depreciation expenses, four percent higher as a result of the aggressive infrastructure investments it made in recent years.

Acquisition of high-value prepaid subscribers slightly lifted Globe’s mobile subscriber base, which stood at 58.6 million in the first quarter, two percent higher than a year ago. Globe’s prepaid segment accounted for 99 percent of subscriber identification modules (SIM) during the period. Effective this reporting period, Globe will report subscriber information based on a churn rate of 90 days from the previous 120 days.

As part of its commitment to improve LTE capacity and network coverage, Globe has deployed 260 LTE700 and 30 LTE2600 sites during the first quarter using frequencies obtained from the San Miguel acquisition. It also launched 155 sites utilizing the LTE1800 frequency.

Water

Because of higher costs from new investments and expansion initiatives, Manila Water posted a two percent decline in its net earnings to P1.4 billion in the first quarter. Consolidated revenues, however, rose three percent to P4.4 billion owing to a slight increase in billed volume during the period.

Manila Water continues to pursue growth opportunities outside the Manila Concession. In the first quarter, its businesses outside the Manila Concession accounted for 19 percent of its net income. Manila Water Philippine Ventures, Manila Water’s holding company for its domestic subsidiaries outside the Manila Concession, recorded attributable net income of P145 million, 36 percent higher than the previous year, bolstered by the robust performance of Estate Water, Laguna Water, and Cebu Water.

Estate Water recorded a net income of P66 million, surging nearly fourfold as its operations continued to ramp up. Strong billed volume growth in Laguna Water and Cebu Water drove their net earnings during the period, which expanded 24 percent to P54 million, and 46 percent to P19 million, respectively.

Revenues from the Manila Concession were flat at P3.6 billion, tracking the one percent growth in billed volume during the period. Non-revenue water stood at 12.2 percent, a one percentage-point decline from the previous year. Collection efficiency stood at 102 percent.

Manila Water continues to ramp up its expansion initiatives geographically and across its products and services. In the Philippines, Manila Water Philippine Ventures through Laguna Water will be taking over the water distribution of Calauan town, further expanding its footprint in the province of Laguna. Moreover, Boracay Water started supplying bulk water to the municipality of Malay in the province of Aklan. In Vietnam, Manila Water Asia Pacific completed the negotiations with Tan Hiep, the water supplier of Saigon Water Corporation in the Hoc Mon District of Ho Chi Minh City, for a bulk water operations project. It also won a full water distribution operations contract to serve the central highlands of Gia Lai Province in Vietnam. Manila Water Total Solutions launched in April the 500-milliliter “Healthy Family Mini” purified water.

Industrial Technologies

In March, AC Industrials assumed Ayala’s 50.7 percent ownership in Integrated Micro-Electronics originally held by AYC Holdings. The transaction consolidated Ayala’s existing assets in manufacturing, and vehicle distribution and dealership under AC Industrials, to execute Ayala’s vision to assemble a portfolio of businesses that own, develop, enable, manufacture, and commercialize automotive and other industrial technologies platforms.

AC Industrials recorded P332 million net income, 22 percent higher from the previous year driven by the robust performance of both its electronics manufacturing and automotive retail businesses.

Solid topline growth and better gross profit margins lifted IMI’s net income, which expanded 33 percent to US$8.7million (P434.1 million). As of 2016, IMI was the 20th largest global EMS provider according to Manufacturing Market Insider, a notch higher from its 2015 ranking.

IMI’s revenues climbed 18 percent to US$235.9 million (P11.8 billion) led by its Europe, Philippine, and Mexico operations. In addition, the consolidation of newly-acquired VIA Optronics boosted IMI’s core businesses, contributing US$23.9 million in revenues during the first quarter of the year. IMI’s gross profit reached US$28.9 million, 38 percent higher from the previous year, with gross profit margin improving to 12.2 percent from its year ago level of 10.5 percent.

In April, IMI announced the acquisition of an 80 percent stake in UK-based STI Enterprises Limited, subject to closing conditions and regulatory approval. STI provides electronics design and manufacturing solutions in both printed circuit board assembly and full box-build manufacturing for high-reliability industries. This acquisition will enable IMI to expand into the aerospace and defense markets while strengthening the industrial segment in manufacturing, as well as in technology development and engineering.

AC Industrials’ automotive business recorded a net income of P117 million, 10 percent higher than the previous year on the back of robust sales of its Honda BR-V and Civic models. Revenues rose 37 percent to P7.6 billion driven by robust demand across all brands.

KTM Philippines manufactured its first motorcycle, with the formal opening of its manufacturing facility set to commence in June of this year. Located in IMI’s complex in Laguna, the facility has an estimated annual production capacity of 20,000 motorcycles, the majority of which is meant for export to China and to Southeast Asian countries.

Power Generation

Sustained operating efficiencies of its power assets drove AC Energy’s results in the first quarter. Net income surged 25 percent to P313.7 million. This was achieved despite the annual maintenance for AC Energy’s conventional energy assets, South Luzon Thermal Energy Corporation and GNPower Mariveles, which was scheduled during the period.

AC Energy continues to execute on its 2020 target of doubling its total attributable capacity to 2,000 megawatts, while increasing its portfolio of renewable energy to 1,000 megawatts. In March, it acquired 100 percent ownership of Bronzeoak Clean Energy and San Carlos Clean Energy. These bring complementary strengths to AC Energy, specifically in renewable energy development, management, and operations.

Also in March, as part of an Indonesian consortium, AC Energy completed the acquisition of Chevron Global Energy Inc. and Union Oil Company of California’s geothermal assets and operations in Indonesia. These assets have a combined capacity of approximately 637 megawatts of steam and power, and will contribute to AC Energy’s growing portfolio of renewable energy assets.

Infrastructure

AC Infrastructure continues to optimize the operations of its three public-private partnership projects. Light Rail Manila Corporation, which manages and operates LRT 1, increased average daily train trips to 471 from 462 during the same period in 2016. It averaged close to 445,000 daily riders for the first three months of the year. The Muntinlupa-Cavite Expressway averaged close to 28,000 vehicles per day, up 29 percent year-on-year as of March 2017. Meanwhile, the Beep ticketing system now has close to 3.1 million cards in circulation since its launch in 2015. AC Infra reported a net income of P9 million for the first quarter of the year.

In March, AC Infra, together with SM Investments Corporation, submitted its first unsolicited proposal to the Department of Public Works and Highways to design, finance, construct, operate, and maintain for a 35-year period an 8.6-kilometer elevated toll road linking Sta. Mesa, Manila to the Mall of Asia Complex in Pasay City via the Central Business District. The proposed C3 Elevated Expressway (C3EX) completes the Circumferential Road 3 and is expected to reduce traffic congestion along Epifanio Delos Santos Avenue and improve access to Manila Bay development areas, the Makati central business district, and the cities of Mandaluyong, San Juan, and Manila.

In May, LRMC broke ground for pre-construction work on the LRT-1 Cavite Extension. The project will connect the existing LRT-1 line to an 11.7-kilometer alignment with eight passenger stations located in Paranaque, Las Pinas, and Cavite.

Social Infrastructure

In healthcare, Generika’s revenues grew 10 percent year-on-year to P746.9 million driven by higher distribution and retail sales. As of the first quarter, Generika had a footprint of 684 stores nationwide. Meanwhile, AC Health’s full-service primary care community clinics, FamilyDOC, served close to 21,000 unique patients as of the first three months of the year. To date, AC Health operates six FamilyDOC clinics in the southern Greater Manila Area. FamilyDOC targets to open 18 new clinics this year, with the expansion to commence in July.

AC Education continues to deliver affordable, quality education in both secondary and tertiary levels. Its Affordable Private Education Center will welcome its first batch of Grade 10 junior high school students and Grade 12 senior high school students for the upcoming school year 2017 to 2018. It has a network of 24 school branches in the Greater Manila Area and surrounding provinces. In tertiary education, University of Nueva Caceres graduated 680 college students in March, its second batch under AC Education.

Balance Sheet

Ayala’s balance sheet remains healthy with ample capacity to undertake investments as well as cover its dividend and debt obligations. In April, Ayala redeemed its P10 billion, 7.20% fixed rate putable bonds due 2017. The amount was fully paid at the bond’s maturity date. As of the first quarter of the year, parent level cash stood at P24.2 billion, with net debt at P62 billion. Ayala’s net debt-to-equity ratio stood at 0.57x at the parent level and 0.65x at the consolidated level. The conglomerate’s loan-to-value ratio, the ratio of its parent net debt to the total value of its assets, was at 10.4 percent at the end of March 2017.

On April 6th 2017, Integrated Micro-Electronics, Inc. (PH:IMI), a publicly-listed subsidiary of the newly-formed AC Industrial Technology Holdings (AC Industrials), signed an agreement to purchase, subject to closing conditions, 80% of the ordinary shares of STI Enterprises Limited (STI), an electronics manufacturing services (EMS) company based in the United Kingdom, with factories in Hook and Poynton in the United Kingdom and Cebu, Philippines.

As part of IMI’s diversification and expansion strategy, the acquisition of STI will help strengthen its industrial and automotive manufacturing competencies, broaden its customer base, and will also provide access to the UK market through two acquired factories. Further, the partnership allows the group’s entry into the aerospace and defense sectors.

“IMI’s investment in STI is part of AC Industrial’s deliberate and focused strategy to own, develop, enable, manufacture, and commercialize disruptive technologies and solutions across various industries including industrial and automotive. The addition of STI to AC Industrials is also expected to generate significant synergies with other business units within the group,” said Arthur Tan, CEO of IMI and AC Industrials.

“We are excited to partner with STI and establish our manufacturing presence in the UK. As we ramp up our investments in industrial technologies, we can greatly benefit from STI’s solid manufacturing and engineering capabilities and foothold in the complementary segments of aerospace, industrial, and defense. In turn, we believe that with its industry leadership and diversified global footprint, AC Industrials can add significant value to STI’s existing capabilities,” Ayala Chairman and CEO Jaime Augusto Zobel de Ayala said. “We look forward to working with STI as we jointly pursue exciting opportunities amid the rapidly changing technology trends in the global environment,” Mr. Zobel noted.

“Earlier this week in Manila, I had the pleasure of meeting Jaime Zobel de Ayala and his team. Yesterday’s signing at the British Ambassador’s Residence paves the way for a great partnership with Surface Technology International in the UK. The UK continues to be a very attractive destination for investment, including from the Philippines. Our Embassy has continued to forge an excellent relationship with both parties and my Department will continue to provide ongoing support to this exciting venture,” said the Rt Hon Liam Fox MP, UK Secretary of State for International Trade.

The signing ceremony was attended by, among others, the British Ambassador to the Philippines, Asif Ahmad; Jaime Augusto Zobel de Ayala; Vice Chairman of AC Industrials, Fernando Zobel de Ayala; Arthur Tan; Managing Director and Founder of STI, Simon Best; and Director of STI, Tony Best.

About Ayala Corp.

Ayala Corporation is the holding company of one of the oldest and largest business groups in the Philippines. It maintains a tradition of excellence, and integrity has run continuously through seven generations, adhering to the principles and ideals that had brought it to existence more than 180 years ago. Today, Ayala has leadership positions in real estate, financial services, telecommunications, water infrastructure, electronics manufacturing, automotive distributorship and dealership, and new investments in power generation, transport infrastructure, education and healthcare.

Publicly listed in the Philippine Stock Exchange (PSE:AC), Ayala and its subsidiaries have a market capitalization that reaches nearly P2 trillion, accounting for 20% of the Philippine Stock Exchange index. Ayala has leveraged its portfolio of assets, brand equity, and competitive advantages to enhance its position of leadership in its key lines of business. It continues to contribute to Philippine economic and social growth through its diverse business interests, maintaining its tradition of excellence in every endeavor.

Ayala’s commitment to corporate social responsibility is largely expressed through Ayala Foundation’s programs that cover education, youth leadership, sustainable livelihood, and art and culture. Gearing up to move further forward, Ayala draws on its heritage and experience to fulfill its brand promise of “Accelerating the Future”.

About AC Industrials

AC Industrials, a wholly-owned subsidiary of Ayala Corporation currently houses Ayala’s existing assets in manufacturing and vehicle distribution and dealership, creating a platform to execute on Ayala’s vision to assemble a portfolio of businesses that own, develop, enable, manufacture, and commercialize automotive and other industrial technologies across various platforms to capture opportunities in the domestic and global markets.

About IMI

Integrated Micro-Electronics Inc. (IMI) is a leading provider of electronics manufacturing services (EMS) and power semiconductor assembly and test services. It serves diversified markets that include those in the automotive, industrial, medical, solar energy, telecommunications infrastructure, storage device, and consumer electronics industries. Committed to cost-effective and top-quality customized solutions, IMI’s comprehensive capabilities and global manufacturing presence allow it to take on specific outsourcing needs. IMI’s flexible solutions encompass design and product development, manufacturing, and order fulfillment. IMI is consistently ranked among the top 30 EMS providers in the world. A subsidiary of Ayala Corporation, IMI is listed in the Philippine Stock Exchange. IMI has manufacturing and engineering facilities in the Philippines, Singapore, China, and the U.S.A.

For more information, visit http://www.global-imi.com

About STI

Surface Technology International is a specialist Contract Electronics Manufacturer, serving world-class customers in high-reliability industries by providing a complete set of electronics design and manufacturing solutions in both printed circuit board assembly (PCBA) and full box-build manufacturing. We are organized into Manufacturing, Supply-Chain, Research & Development. Headquartered and operating from a manufacturing site in the UK since 1989, we purchased a second manufacturing facility in South East Asia in 2010; with both platforms equipped with the same machinery and processes. STI purchased a further manufacturing site in 2015 in Poynton, Manchester, UK – to manufacture airborne and naval Satcom products. STI can now offer its full range of capabilities at an optimal cost point to meet most CEM requirements. Our ongoing success depends on consistently delivering superlative customer satisfaction based upon quality and performance.

For more information, visit http://www.sti-limited.com.

Press Contact:

Yla Patricia G. Alcantara 
Corporate Communications Head 
Ayala Corporation 
+63 2 908 3000

Ayala Corporation reported a net income of P26 billion in 2016, 17 percent higher than the previous year, on the back of double-digit growth contributions from its real estate and banking units, boosted by its emerging businesses in power and industrial technologies.

This positive earnings momentum was driven by the robust equity earnings contribution from Ayala business units, which expanded 14 percent from its year-ago level, to P32 billion. Equity earnings from the Bank of the Philippine Islands and Ayala Land jumped 19 percent and 18 percent, respectively. Meanwhile, equity earnings from AC Energy soared 27 percent, while equity earnings from AC Industrials grew 51 percent as its automotive business surged nearly fivefold during the year.

“Ayala capped its five-year strategic target in 2016 with net income expanding nearly threefold and a 23 percent compounded annual growth rate since we put the plan in place in 2011. We believe this was achieved through our disciplined execution and a strong domestic environment,” Ayala President and Chief Operating Officer Fernando Zobel de Ayala said.

Real Estate

Ayala Land recorded a net income of P20.9 billion, growing 19 percent from a year ago, boosted by strong improvements in its property development and commercial leasing businesses.

The steady traction of Ayala Land’s residential and office sale segments, combined with commercial and industrial lot sales, lifted property development revenues to P79.2 billion, 17 percent higher year-on-year.

Residential revenues rose 12 percent to P65.1 billion on higher bookings and newly completed projects. Office for sale revenues surged 27 percent to P8.8 billion, mainly supported by Alveo Park Triangle Towers. Meanwhile, commercial and industrial lot revenues doubled to P5.9 billion owing to strong lot sales in Arca South, Altaraza, and Naic, Cavite.

Ayala Land continues to build up its recurring income portfolio. Revenues from mall leasing grew 12 percent to P15 billion on the improved performance of established malls and contributions from newly opened malls. Office leasing revenues, meanwhile, increased 7 percent to P5.5 billion as new office developments came on stream. Revenues from hotels and resorts were steady at P6 billion. On a consolidated basis, Ayala Land’s recurring income business accounted for 31 percent of its net income during the year.

Ayala Land launched 43 projects valued at P88 billion during the year, P62 billion of which accounted for residential and office for sale projects. It spent P85.4 billion in capital expenditures and introduced two key mixed-use developments—One Ayala in Makati Central Business District and the 17.5-hectare Gatewalk Central in Mandaue, Cebu. Ayala Land currently has 20 estates in key growth centers in the country.

Ayala Land plans to complete seven shopping centers this year with a total gross leasable space of 224,000 square meters. These include the recently opened Ayala Malls The 30th in Pasig, as well as Ayala Malls Vertis North in the Quezon City central business district, Ayala Malls Feliz in Cainta, and Ayala Malls One Bonifacio High Street in Bonifacio Global City, among others. In addition, it expects to complete a total of 185,000 square meters of gross leasable office space in locations like Vertis North, Circuit Makati, and The 30th in Pasig this year and 837 hotel and resort rooms in various locations such as Vertis North in Quezon City, Bacolod, El Nido, Palawan, and Sicogon Island in Iloilo.

Banking

Bank of the Philippine Islands sustained its earnings trajectory throughout the year, with net profits soaring 21 percent from the previous year to P22.1 billion. This was largely driven by solid gains from the bank’s core banking, transactional, and bancassurance businesses, boosted by significant securities trading gains.

The bank’s comprehensive income expanded 30 percent to P21.7 billion. Total revenues grew 12 percent to P66.6 billion as net interest income rose 10 percent to P42.4 billion, while non-interest income climbed 17 percent to P24.2 billion.

BPI’s operating expenses reached P34.9 billion, up 10 percent from its year-ago level, owing to spending on general infrastructure combined with collective bargaining costs. Revenue growth cushioned the higher operating expenses with the bank’s cost-to-income ratio improving to 52.5 percent from 53.7 percent in 2015.

BPI’s loan portfolio breached the P1 trillion-mark during the year. It jumped 19 percent to P1.04 trillion, with 79 percent and 21 percent accounting for the corporate and retail segments, respectively. The bank maintains a healthy asset base with 90-day gross non-performing loans lower at 1.5 percent, from 1.6 percent a year ago. Reserve cover rose 118.7 percent from 110.2 percent in the previous year. Total deposits climbed 12 percent to P1.43 trillion, with current and savings account ratio at 73.5 percent.

BPI continues to expand both its corporate and retail segments. Last year, BPI arranged a P12.5 billion-Climate Bond for AboitizPower’s Tiwi-Makban geothermal. It also arranged a P15 billion-bond issuance for Ayala Land and the P19.2 billion-initial public offering of Pilipinas Shell, both highly successful offerings. In retail, BPI secured approval from the Bangko Sentral ng Pilipinas to open 44 new branches for both BPI and BPI Family Savings Bank.

Telecom

Despite sustained topline growth, the impact of non-operating and depreciation expenses from its recent strategic acquisitions weighed down on Globe’s net profits in 2016, which declined 4 percent to P15.9 billion.

The depreciation charges arose from incremental asset build–up from the fourth quarter of the previous year and the full consolidation of Bayantel. The non-operating charges included costs related to the San Miguel transaction, consisting of interest expenses for the additional debt incurred for the acquisition, and Globe’s share in the net losses of Vega Telecom and amortization of the intangible assets acquired.

Globe posted a 6 percent growth in consolidated service revenues, reaching a new record of P120 billion. This was primarily driven by robust broad-based demand across data-related products, complemented by healthy subscriber growth.

Mobile revenues were steady at P92 billion, as usage continued to shift from core voice and SMS to mobile data. Despite the intense competitive environment, mobile data is now the biggest contributor to Globe’s mobile revenues, accounting for 38 percent of the segment. Mobile data revenues grew 25 percent from a year ago to P35 billion. Mobile data usage continued to pick up with traffic soaring 44 percent to 361 petabytes from its year-ago level, as smartphone penetration reached 61 percent during the year.

Globe’s subscriber base continued to expand with mobile subscribers reaching 63 million, up 12 percent, bolstered by record-level prepaid acquisitions during the year. Home broadband subscribers grew 6 percent to 1.13 million from a year ago.

Home broadband revenues expanded 28 percent to P14.5 billion attributed to continued subscriber growth in fixed wireless solutions as Globe introduced new home broadband plans. Meanwhile, corporate data revenues climbed 28 percent to P10 billion, boosted by strong demand for domestic and international leased line services, sustained circuit expansion, and the increasing popularity of cloud-based services, such as data storage and cloud computing.

Globe registered a 9 percent-growth in earnings before interest, taxes, depreciation, and amortization, reaching a record P50 billion during the year. EBITDA margin improved to 42 percent from its year-ago level of 40 percent.

In 2016, Globe rolled out over 500 LTE 700 and 1,200 LTE 2600 sites using frequencies obtained from the SMC deal. This year, it is deploying around 1,800 LTE 700 and 1,000 LTE 2600 sites. In addition, it will deploy around 1,800 LTE 1800 sites to boost capacity and coverage. In home broadband, Globe rolled out over 260,000 high-speed lines in 2016. It expects to deploy an additional 425,000 high-speed lines within the year.

Globe programmed approximately $750 million in capital expenditures this year, with the bulk of this allocated for the deployment of LTE mobile and home broadband, expansion of network capacities and coverage, and enhancement of corporate data services.

Water

Manila Water’s net income reached P6.1 billion, up 2 percent from the previous year on the improved performance of the Manila Concession combined with higher contributions from its businesses outside Metro Manila.

The Manila Concession registered a 4 percent growth in billed volume to 478.9 million cubic meters, attributed to increased consumption, combined with higher connections from the expansion areas of Marikina, Pasig and Taguig. The Manila Concession continued to improve its operation efficiencies, with non-revenue water dropping to 10.8 percent from 11.2 percent in the previous year as a result of continuous repair works at distribution lines. Collection efficiency remained robust at 100.2 percent

Outside the Manila Concession, Manila Water Philippine Ventures, Manila Water’s holding company for all its domestic operating subsidiaries outside the Manila Concession, recorded a 96 percent surge in consolidated net income to P570 million, largely driven by Boracay Water, Laguna Water, and the first year of Estate Water’s operations.

Boracay Water’s net income soared 74 percent to P122 million on revenues and managed operating expenses. Laguna Water’s net income jumped 22 percent to P248 million bolstered by new service connections. Meanwhile, Manila Water’s private full-service water and used water operator, Estate Water, booked a net income of P217 million in its first year of operations and billed volume of 2.1 million cubic meters from Ayala Land’s 47 brownfield developments.

Altogether, net income from non-Manila Concession businesses reached P1 billion, accounting for 17 percent of Manila Water’s consolidated net income.

Last December, Manila Water won a 25-year concession to develop and operate the water supply system in Calasiao, Pangasinan. Further, it won another 25-year concession to rehabilitate, operate, and manage the water supply system, and provide water sanitation services in Obando, Bulacan. Manila Water also signed a memorandum of agreement with the SM group to provide water and used water services, initially covering its horizontal real estate projects.

Industrial Technologies

Early last year, Ayala set up AC Industrials to house the group’s investments in industrial technologies, namely Integrated Micro-Electronics and AC Automotive, to take advantage of opportunities in emerging trends in the global manufacturing.

On a combined basis, Ayala’s industrial technologies portfolio reached a net income of P1.8 billion during the year, 29 percent higher than a year ago as its automotive business contributed significant profit growth, lifted by robust vehicle sales across all brands as well as higher contribution from its distribution businesses.

In electronics manufacturing, IMI posted a net income of US$28.1 million (P1.3 billion), 2 percent lower than its year-ago level owing to transaction and financing costs related to strategic acquisitions and foreign exchange headwinds from the Chinese Renminbi.

Notwithstanding a challenging global environment, IMI’s revenues improved 4 percent to US$843 million (P40 billion). This was lifted by VIA Optronics and its Europe and Mexico operations, which contributed a combined US$308 million, a 15 percent growth year-on-year. Operating income expanded 13 percent from a year ago to US$42.9 million.

IMI continues to expand its footprint in higher complex box build offerings, while making disciplined investments to fund its growth initiatives. Last year, IMI spent US$52.3 million in capital expenditures to build more complex and higher value-add manufacturing capabilities and growth platforms.

Power Generation

AC Energy recorded a 25 percent expansion in net earnings during the year to P2.7 billion. This sustained earnings trajectory was fueled by strong equity earnings contribution from its operating assets on improved operating efficiencies, boosted by gains from value realization from its partial sale of shares in South Luzon Thermal Energy Corporation.

Equity earnings from AC Energy’s investee companies climbed 67 percent to P1.8 billion on higher operating efficiencies of GNPower Mariveles and the successful start of operations of South Luzon Thermal Energy Corporation’s second unit.

AC Energy continues to scale up as it executes on its new strategic aspirations of doubling its equity commitment to US$1.6 billion and its attributable power generating capacity to 2,000 megawatts by 2020. Last December, AC Energy, as part of a consortium, signed an agreement with the Chevron Global Energy and the Union Oil Company of California groups for the acquisition of Chevron’s geothermal operations in Indonesia and the Philippines. Moreover, in January 2017, AC Energy signed investment agreements with UPC Renewables Indonesia for the development, construction, and operation of a 75 megawatt-wind farm project in Sidrap, South Sulawesi, Indonesia.

Transport Infrastructure

AC Infrastructure continues to execute on its three public-private partnership projects. For the LRT 1, LRMC increased capacity by 30 percent, with average daily ridership breaching 500,000 in December. The Muntinlupa-Cavite Expressway is currently servicing an average of about 27,000 vehicles daily. Meanwhile, the Beep card posted P9.7 billion in total transactions, reaching 2.8 million users at the end of 2016. The Beep card has now expanded beyond rail to include select bus lines. It is also accepted as a payment platform in 80 FamilyMart stores.

Capital Expenditures

The Ayala group is increasing its capital expenditures this year by 13 percent to P185 billion, primarily to support the growth strategies of its real estate, telecommunications, and water units and ramp up its emerging businesses in power, industrial technologies, healthcare, and education. At the parent level, Ayala has earmarked P21 billion in capital spending this year, largely to fund the investment program of its power business.

Over the past five years, the Ayala group has invested over P700 billion in cumulative capital expenditures across its portfolio of businesses.

“The aggressive capital spending we have programmed this year reflects the Ayala group’s continued optimism in the domestic environment,” Ayala Chairman and CEO Mr. Jaime Augusto Zobel de Ayala said. “While we remain mindful of macroeconomic indicators that may affect the overall business landscape, our business units continue to perform well and carry out their strategic direction for 2020,” Mr. Zobel noted.

Last year, Ayala announced its target to double its net income to P50 billion by 2020 anchored on strong growth projections in its core businesses in real estate, banking, telecommunications, and water, as well as emerging businesses in power and industrial technologies.

Balance Sheet

Ayala’s balance sheet remains at a comfortable level. At the parent level, cash amounted to P16.4 billion while net debt stood at P60 billion at the end of 2016. Net debt-to-equity ratio during the period was 0.56 at the parent level and 0.63 at the consolidated level. Ayala’s loan-to-value ratio, the ratio of its parent net debt to the total value of its investments, stood at 11% percent at the end of 2016.

Ayala Healthcare Holdings, Inc. (AC Health) has invested in early stage startup Wellbridge Health, Inc., which owns and operates MedGrocer, an FDA-licensed ePharmacy and medicine benefits management service. MedGrocer enables customers to order medicines online and have these medicines delivered directly to them.

The investment is part of AC Health’s overall strategy to increase accessibility and affordability in healthcare. AC Health seeks to seed disruptive healthcare solutions that improve efficiency and integration.

“The investment of AC Health into MedGrocer fits well with both our pharmacy and health tech aspirations,” said AC Health CEO Paolo F. Borromeo. “On the pharmacy side, we are exploring new ways to reach the consumer and deliver affordable medicine; on the health tech side, we are looking to build a portfolio of innovative technology solutions across the continuum of care.”

MedGrocer’s online platform allows patients to compare prices and obtain essential information for their medications prior to purchase. All medicines are FDA-certified, and transactions are verified by a licensed pharmacist. In addition to serving individuals, MedGrocer also provides medicines for the clinics of their corporate clients.

“We share the mission of providing quality medicines conveniently and affordably to consumers by using technology to eliminate the inefficiencies and assumptions that hinder pharma retail,” said MedGrocer’s CEO & Founder, Jerome Uy.

MedGrocer joins AC Health’s portfolio of companies, which includes Generika, a retail pharmacy chain, and FamilyDOC, a new chain of primary care clinics. Generika has over 670 stores nationwide, while FamilyDOC has 6 clinics located across Cavite and Las Piñas. AC Health aims to expand this network to 1000 Generika stores, and 100 FamilyDOC Clinics by 2020. MedGrocer is envisioned to complement AC Health’s existing portfolio, as well as provide new opportunities for synergies across the broader Ayala group.

AC Health is a wholly-owned subsidiary of the Ayala Corporation.

The partnership with MedGrocer signals AC Health’s commitment to invest in technologies that strengthen its portfolio, and redefine healthcare.

Ayala Corporation

Ayala Corporation is one of the largest conglomerates in the Philippines with businesses in real estate, financial services, telecommunications, water, electronics manufacturing services, automotive, power generation, transport infrastructure, education, and healthcare. Its corporate social responsibility arm, Ayala Foundation, has programs that focus on education, youth leadership, sustainable livelihood, and arts and culture.

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For further inquiries, contact:
Maria Carissa A. Alejandro
09175692269
alejandro.mca@achealth.com.ph