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Ayala Foundation supports construction of 70-bed Siyapen Center

Ayala Foundation has partnered with the City Government of Marawi and the Autonomous Region of Muslim Mindanao for the establishment of a drug rehabilitation facility in Marawi City, Lanao del Sur.

To be called Siyapen Center (“siyapen” is the Maranao word for “care”), the 70-bed inpatient facility can also accommodate drug dependents undergoing outpatient care. It provides a space that encourages physical wellness and social integration. Located within the community, the center allows drug dependents to have better access to family and other forms of social support, which are crucial to their recovery. In addition, its proximity to a mosque opens up opportunities for spiritual counseling. The facility also allows for other therapeutic activities such as exercise and group sessions.

The Siyapen Center will occupy an existing building owned by the City Government of Marawi. Through Makati Development Corporation (MDC), the construction arm of Ayala Land Inc., Ayala Foundation will oversee the refurbishment of the structure, in keeping with the requirements for an efficient and humane drug rehabilitation facility.

MDC will work on the facility from January to April 2017. Once completed, the Siyapen Center will be turned over to the City Government of Marawi for operations.

“The Siyapen Drug Rehabilitation Center is our way of addressing another challenge Mindanao faces, and of responding to the national government’s call for private sector support in addressing the drug problem,” said Jaime Augusto Zobel de Ayala, chairman and CEO of Ayala Corporation and co-chairman of Ayala Foundation.

“At Ayala, we have always believed that, whether in Mindanao or elsewhere in our archipelago, fostering inclusive development will always require collaboration between the government and the private sector,” Zobel de Ayala added.

“We believe that the Siyapen Center will contribute significantly to the treatment and rehabilitation of drug dependents in ARMM, primarily in Marawi City,” said Ruel Maranan, president of Ayala Foundation. “In building Siyapen, we hope to provide a space where person-centered recovery is made first priority, thereby paving the way for meaningful reintegration into society.”

The construction of the Siyapen Center is part of Ayala Foundation’s continuing development efforts in Mindanao, particularly in the Autonomous Region of Muslim Mindanao.

In 2015, the foundation kicked off the Basilan Young Leaders Program–Leadership Communities, in partnership with the ARMM Office of the Regional Governor and the Eisenhower Fellows Association of the Philippines. Working with community-based youth, the program equipped these young leaders with the leadership skills to develop, implement, and monitor projects that address urgent needs in their respective barangays.

In 2016, the program grew to cover 10 areas in ARMM, and transformed into the Bangsamoro Young Leaders Program–Leadership Communities (BYLP–LeadCom). The inaugural batch of BYLP–LeadCom participants joined a learning tour of key locations in the Philippines. This year, they will conceptualize and operationalize change projects that they plan to implement in their respective communities.

Ayala Foundation has also brought Training Institute, a teacher-training program that works within the philosophy for children framework, to two public elementary schools in Basilan.

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About Ayala Foundation

As the social development arm of the Ayala group of companies, Ayala Foundation envisions communities where people are creative, productive, self-reliant, and proud to be Filipino. Ayala Foundation’s main program areas are Education, Youth Leadership, Sustainable Livelihood, and Arts and Culture. For more information, visit www.ayalafoundation.org, or “Like” facebook.com/ayalafoundation.

Contact:

Cel Amores                                                                        Paul de Guzman
amores.cr@ayalafoundation.org                                        deguzman.js@ayalafoundation.org
+63917 810 9945                                                               +63917 558 6764

Ayala Corporation registered a net income of P19.6 billion in the first nine months of the year, expanding 11 percent from the previous year as its banking, real estate, and automotive businesses sustained their robust performance.

This healthy earnings trajectory was buoyed by strong equity earnings contribution from Ayala’s business units, which amounted to P23.6 billion, 10 percent higher year-on-year. Equity earnings from the Bank of the Philippine Islands and Ayala Land climbed 23 percent and 17 percent, respectively. Meanwhile, equity earnings from Ayala Automotive nearly tripled during the period.

“As they execute on their individual 2020 strategies, our businesses continue to perform well and within targets. As we develop new investments, we are happy to see our power business emerging to be a significant player in the space. With 1,000 megawatts in attributable capacity, AC Energy is beginning to be a major contributor to the country’s energy requirements. Further, we expect it to be a meaningful part of Ayala’s portfolio in the next five years,” Ayala President and Chief Operating Officer Fernando Zobel de Ayala said.

Real Estate

Ayala Land recorded a net income of P15.1 billion in the first nine months of the year, a 17 percent-growth year-on-year driven by higher revenues from its residential development and commercial leasing segments as well as commercial lot sales. This was further lifted by steady margins across various product lines.

Total revenues grew 14 percent to P85.5 billion. Revenues from property development jumped 12 percent to P52.6 billion as booked sales rose 12 percent to P57.9 billion while reservation sales went up 2 percent to P84.3 billion. New lot sales in Arca South, Alviera and Altaraza likewise boosted property development revenues.

Revenues from commercial leasing expanded 12 percent to P19.2 billion, lifted by improved performance of existing and new malls, hotels and resorts, and contribution from newly opened offices. Shopping center revenues climbed 15 percent to P10.6 billion, while office leasing revenues rose 10 percent to P4 billion. Meanwhile, revenues from hotels and resorts inched up 6 percent to P4.6 billion. Collectively, its recurring income business accounted for 38 percent of Ayala Land’s net income during the period.

Banking

Strong gains from its core banking, trading, and fee-based businesses sustained the Bank of the Philippine Islands’ net earnings in the first nine months, climbing 26 percent to P17.4 billion from its year-ago level.

Total revenues expanded 14.3 percent from a year ago to P50.4 billion. Non-interest income jumped 24 percent to P19.1 billion on the back of strong trading gains as well as fees from the bank’s transactional and bancassurance businesses. The bank’s average asset base increased 12.5 percent fueling a 9 percent increase in net interest income to 31.3 billion pesos.

The bank’s operating expenses grew 12 percent attributed to non-recurring collective bargaining costs and accelerated technology-related spending. Notwithstanding the higher operating expenses, BPI’s cost-to-income ratio improved to 50.7 percent from the 51.9 percent registered in the previous year.

BPI’s lending portfolio grew 19 percent to P931.1 billion mainly driven by corporate loans, which accounted for 77 percent of its loan book. BPI maintains a healthy asset base, improving gross 90-day non-performing loans ratio to 1.6 percent from 1.8 percent during the previous year. Total assets in the first nine months of the year reached P1.6 trillion. The bank recorded deposit liabilities of P1.3 trillion, a 12 percent growth year-on-year with a current and savings account ratio of 75.2 percent.

BPI continues to achieve financial inclusion through increased efforts in the Micro, Small and Medium Enterprises (MSMEs) segment. In September, BPI assumed full ownership of BanKO, a mobile-based savings bank that extends financial services to unbanked households and entrepreneurs.

Telecom

Despite intense competition, Globe posted higher topline growth in the first nine months of the year, with service revenues growing 7 percent to P89.1 billion spurred by gains across data-related product segments. Consolidated EBITDA during the period reached P37.5 billion, 8 percent higher year-on-year while EBITDA margin held steady at 42 percent compared to the previous year.

However, higher operating expenses, depreciation and non-operating charges mostly incurred in the third quarter, weighed on Globe’s nine-month performance. Globe’s net income declined 17 percent from the previous year to P11.7 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.

Globe continues to improve its mobile subscriber base, growing 23 percent to 65.4 million. Mobile revenues, however, slightly improved to P68.3 billion owing to the continued shift from the core voice and SMS towards mobile data. Home broadband revenues sustained its growth momentum with P10.7 billion, a 36 percent-growth from a year ago. Globe’s corporate data revenues expanded 33 percent to ?7.3 billion.

Globe continues to invest in improving service delivery by deploying cell sites to utilize the additional 700 megahertz and 2600 megahertz frequencies. Globe has rolled out close to 260 LTE 700mhz and 900 LTE 2600mhz frequencies as of September. Moreover, Globe will increase its capital expenditures for the year by $300 million to fund network expansion.

Water

Manila Water’s net income rose 6 percent in the first nine-months to P4.9 billion largely driven by strong growth of its domestic businesses, supported by the steady expansion of Manila Concession.

Manila Water’s businesses outside the Manila Concession contributed ?2.1 billion in combined revenues, 43 percent higher year-on-year. Boracay Water posted the highest revenue growth at 31 percent to P388 million and Laguna Water at 21 percent to P714 million. Estate Water, Manila Water’s private full-service water and used water operator, recorded P316 million in revenues. Together, Manila Water’s businesses outside the Manila Concession accounted for 16 percent of Manila Water’s bottomline during the period.

Total billed volume during the period was up 4 percent to 538.1 million cubic meters. Billed volume in the Manila Concession grew 4 percent to 360.3 million cubic meters on increased water connections. Manila Water maintained its operating efficiency in the Manila Concession as its non-revenue water ratio held steady at 11.7 percent. Collection efficiency remained strong at 99.9 percent.

Industrial Technologies

Early this year, Ayala set up AC Industrials to house the group’s investments in industrial technologies to take advantage of opportunities in emerging trends in the global automotive manufacturing space. Through Integrated Micro-Electronics and Ayala Automotive, Ayala is leveraging the group’s experience and expertise in automotive electronics and distributorship to assemble a portfolio of investments in vehicle manufacturing, assembly, retail, and tier 1 technologies.

On a combined basis, Ayala’s industrial technologies portfolio reached a net income of P1.5 billion in the first nine months, 25 percent higher than a year ago on solid performance of automotive dealership.

IMI registered a net income of $20.8 million (P977 million), 5 percent lower year-on-year, as productivity improvements were tempered by higher depreciation expenses. Revenues during the period were slightly lower at $615.7 million from $621.5 million as a result of slower demand in the consumer and computing segments. IMI’s operating income grew 4 percent to $28.8 million in the first nine-months of the year.

Operations from Europe and Mexico climbed 12 percent to $228.9 million attributed to robust sales of automotive body controls. IMI’s China operation posted $195.8 million in revenues, down 9 percent resulting from a strategic shift to exit certain consumer electronics business and weaker demand for telecom infrastructure platforms. Revenues from IMI’s EMS operations in the Philippines was flat at $166.6 million following end-of-support for computing peripherals.

In August, IMI acquired a 76 percent stake in German company VIA optronics, a leading optical bonding and display solutions provider, whose proprietary technology strengthens IMI’s position in offering complementary automotive camera and display monitor solutions for advanced driver assistance systems.

Meanwhile, Ayala Automotive sustained its earnings trajectory with a nearly threefold expansion in net income to P492 million in the first nine months. This was largely driven by higher dividend income from Isuzu Philippines and robust sales in the Isuzu and Honda brands.

In September, Ayala Automotive opened its flagship dealership of KTM motorcycles in Bonifacio Global City. The dealership forms part of Ayala Automotive’s partnership with KTM AG to distribute and manufacture motorcycle models in the Philippines under the KTM brand. KTM is the largest motorcycle manufacturer in Europe with market share of 9.6% in Europe and 6.2% in North America. Meanwhile, the manufacturing of the motorcycles was subcontracted to IMI with annual production of 20,000 units primarily for export to China and subsequently, to Southeast Asian countries.

Power and Transport

Equity earnings of AC Energy expanded nearly threefold in the first nine months of the year as operating levels of its power generation plants significantly improved. It recorded a net income of P1.2 billion, 28 percent lower year-on-year owing to the absence of capital gains from the partial sale of its stake in North Luzon Renewable Energy Corporation realized in the previous year.

In September, AC Energy achieved its target of 1,000MW in attributable capacity as the construction of the first unit of its 2x668MW power plant GNPower Dinginin in Bataan went full swing. To date, AC Energy has seven thermal, wind, and solar power generation assets, with five operating plants delivering 1,000MW of power to the grid. The two plants under construction, GNPower Kauswagan and GNPower Dinginin, are expected to add another 1,200MW to the grid in 2018 and 2019, respectively. Last month, AC Energy announced its aspiration of assembling another 1,000MW in attributable capacity by 2020, 60 percent of which will be renewable energy.

In transport, AC Infrastructure sustained its positive trajectory in the first nine months of the year with a net income of P59 million, driven by revenues from the three public-private partnerships in its portfolio. As of October, Light Rail Manila Corporation, which operates and maintains LRT1, has increased the number of light rail vehicles by 19 percent since it took over the system last year. The Muntinlupa-Cavite Expressway is now serving a daily average of close to 26,000 vehicles as of October, while the Beep ticketing system has sold over 2.5 million cards, accumulating around P3.9 billion in transactions across rail, bus, and tollroad systems since its launch last year.

Balance Sheet

Ayala’s balance sheet remains at a comfortable level. At the parent level, cash amounted to P33.1 billion while net debt stood at 53.4 billion as of September. Net debt-to-equity ratio during the period was 0.49 at the parent level and 0.62 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 8.5 percent as of September.

Ayala Corporation’s net income climbed 32 percent in the first half of the year to P13.8 billion as its banking, real estate, power, and automotive businesses delivered robust results.

Equity earnings from Ayala’s business units reached P16.4 billion in the first semester, 24 percent higher from a year ago, boosted by strong contributions from the Bank of the Philippine Islands, which jumped 32 percent, and Ayala Land, which expanded 16 percent. In addition, Ayala’s unlisted businesses registered solid performance in the first semester led by AC Energy and Ayala Automotive, which both expanded threefold.

“Most of our business units recorded an overall strong performance in the first half of the year. Among our new businesses, our power unit is starting to contribute significantly to our bottomline,” Ayala President and Chief Operating Officer Fernando Zobel de Ayala said. “We continue to strengthen our portfolio by entering new industries or reinventing our existing businesses. For instance, we are developing an automotive and manufacturing portfolio in order to maximize synergies in the Ayala group and take advantage of the exciting opportunities in this space,” Mr. Zobel added.

Real Estate

Ayala Land’s net profits expanded 16 percent to P9.7 billion in the first semester largely driven by strong revenue growth and higher margins of its residential and leasing businesses.

Revenues from the property development segment, composed of sales from residential units, office spaces, and commercial lots, grew 6 percent to P36 billion. The sustained demand in Ayala Land’s higher end and mid-range brands lifted its residential development revenues, up 8 percent to P29 billion. Reservation sales went up 5 percent to P55.1 billion, while booked sales improved 8 percent to P33.3 billion.

Meanwhile, office space sales jumped 44 percent driven by the completion of the Alveo Financial Tower. In commercial leasing, revenues from shopping centers climbed 16 percent to P7 billion on higher contribution from newly opened malls, while revenues from office leasing increased 6 percent to P2.6 billion supported by newly launched office spaces. Together with hotels and resorts, mall and office leasing, the recurring income business contributed 40 percent to Ayala Land’s net income during the first half of the year.

Ayala Land spent P43.4 billion in capital expenditures during the period, accounting for 51 percent of its budget of P84.5 billion earmarked for the year.

Banking

Bank of the Philippine Islands registered robust results in the first semester with net income soaring 36 percent to P12.7 billion bolstered by its core banking business and securities trading gains during the period.

BPI’s comprehensive income, which represents the net change in fair value reserve on the bank’s available for sale securities and investments of insurance subsidiaries, jumped 54 percent to P13.9 billion. Total revenues expanded 21 percent to P35.2 billion. Net interest income grew 10 percent to P20.7 billion as the bank’s average asset base expanded 12 percent.

BPI’s non-interest income surged 42 percent to P14.5 billion primarily driven by securities trading gains and higher income from bank fees and commissions, bancassurance, and capital markets. Last June, taking advantage of a rallying bond market, the bank sold a portion of its hold-to-maturity securities to fund loan growth, reduce relatively expensive deposits, and enhance capital.

BPI’s total loans expanded 19 percent to P904.4 billion largely driven by its corporate segment, which climbed 20 percent. Total deposits increased 11 percent to P1.3 trillion with current and savings account ratio at 73.5 percent. The bank’s total assets stood at P1.6 trillion during the first half of the year, 11 percent higher than a year ago.

Telecom

The increasing demand for data-related services across mobile, broadband, and corporate segments continued to drive Globe’s topline growth, with service revenues climbing 11 percent to P59.6 billion in the first half of the year. In addition, Bayan, which contributed P3 billion in standalone revenues, supported Globe’s growth trajectory during the period.

The increases in depreciation arising from its capital expenditure programs completed in 2015 and Bayan’s depreciation charges and non-operating charges tempered Globe’s net earnings during the period, up 3 percent to P9 billion from a year ago. Its core net income, which excludes the impact of non-recurring charges, foreign exchange gains, and mark-to-market charges, went up 2 percent to ?8.8 billion.

Mobile revenues grew 3 percent to P45.7 billion in the first half of the year largely driven by strong subscriber expansion in the prepaid segment. Mobile data service revenues surged 46 percent to P17.8 billion supported by rising smartphone penetration coupled with Globe’s data-driven products and offerings. At the end of June 2016, Globe’s mobile subscribers stood at 61.3 million, a 20 percent-growth year-on-year.

In home broadband, Globe posted a 49 percent growth in revenues as it expanded its subscriber base, reaching 1.14 million customers in the first semester, a 38 percent-jump from the previous year. Similarly, Globe’s corporate data business surged 55 percent to P4.9 billion in the first semester on the back of strong demand for digital services and data connectivity solutions.

This translated to a 13 percent growth in consolidated EBITDA to P25.6 billion in the first semester, with EBITDA margin at 43 percent, slightly higher than the 42 percent recorded in the previous year.

Under a co-use agreement approved by the National Telecommunications Commission, Globe is currently rolling out its LTE service using the 700 megahertz and 2500 megahertz frequencies which form part of the telecommunications assets acquired from San Miguel Corporation. It has so far deployed over 80 700MHz cell sites nationwide and over 600 2500MHz cell sites in the Visayas and Mindanao regions to cover large enterprises and highly urbanized areas. This acquisition of frequency assets had no impact in Globe’s first semester results.

Water

The continued expansion in the Metro Manila East Zone combined with the solid performance of its domestic businesses drove the 3 percent growth in Manila Water’s net earnings in the first semester to P3.1 billion. This balanced out the 3 percent tariff reduction in the Metro Manila East Zone concession.

Billed volume in the East Zone improved 5 percent as a result of the expansion in the Taguig, Pasig, and Rizal areas. The non-revenue water ratio was steady at 11.4 percent while collection efficiency remained solid at 100 percent. Manila Water’s domestic operating subsidiaries sustained its momentum, with Laguna Water, Boracay Water, Clark Water, and Cebu Water posting a consolidated billed volume growth of 11 percent.

Contribution from its businesses outside the East Zone expanded 5 percent, accounting for 14 percent of Manila Water’s net income in the first half of the year.

Estate Water, Manila Water’s private full-service water and used water operator, is in discussion with various property developers for potential projects in the country. Early this year, Estate Water partnered with Ayala Land to provide water and used water services to the 56 mixed use developments of Ayala Land nationwide.

Manufacturing and Automotive

IMI posted a flat net income in the first semester at $15 million, as higher margins from the automotive and industrial product segments and line productivity and cost savings initiatives were partially offset by foreign exchange headwinds due to a stronger dollar. Operating income climbed 19 percent year-over-year to $20.7 million.

Revenues slipped 2 percent to $410 million owing to a decline in the consumer and computing segments, offsetting the growth in the automotive, industrial, and telecommunications segments.

IMI’s Europe and Mexico operations recorded $153.4 million in revenues in the first half, an 11.5 percent improvement from a year ago on higher demand for automotive body controls and lighting systems assembled in Bulgaria and Czech Republic.

IMI’s China operations posted $130.4 million in revenues, down 10.7 percent year-on-year mainly due to weak performance of the consumer electronics lines. Revenues for IMI’s EMS operations in the Philippines was flat at $109.6 million. Lines for automotive cameras, security and access controls, asset tag sensors, and lighting controls continued on the growth path, partially offsetting the weak storage device business.

In automotive, Ayala Automotive sustained its growth trajectory, more than tripling its net earnings to P402 million in the first half of the year. This was supported by strong sales across the Honda and Isuzu brands, lifted by higher contributions from the Isuzu distribution businesses.

Power and Transport

In power, AC Energy almost tripled its net income for the same period from the previous year to P578 million, largely driven by higher equity earning contributions from its operating thermal plants, GNPower Mariveles in Bataan and South Luzon Thermal Energy Corporation in Batangas.

In July, GNPower Kauswagan (GNPK), AC Energy’s limited partnership with the Philippine Investment Alliance for Infrastructure (PINAI) Fund and Power Partners Ltd., achieved financial close for the fourth unit of its 4 x 151 MW (gross) thermal facility in Kauswagan, Lanao del Norte. Construction of the GNPK project is in full swing and the first three units are expected to be completed by 2018. GNPK will operate as a baseload plant to support the power demand and economic development of Mindanao.

AC Energy currently has around 750MW in attributable capacity across its thermal and renewable platforms, and is expected to exceed 1,000 megawatts of attributable capacity by the end of 2016.

In transport, AC Infrastructure recorded a net income of P27 million in the first semester following the system takeover of LRT1 in September 2015. AC Infrastructure currently has three (3) operating public-private partnership projects in its portfolio – the 4-kilometer MCX toll road, the Beep ticketing system, and the extension, operations and maintenance of LRT1.

Balance Sheet

Ayala’s balance sheet remained healthy. At the end of June 2016, cash at the parent level stood at P31.2 billion, with debt at P81.4 billion. Ayala maintains a comfortable gearing level with net debt to equity ratio at 0.43 at the parent level and 0.61 at the consolidated level. The conglomerate’s loan-to-value ratio or the ratio of its parent net debt to the value of its investments stood at 8.1 percent at the end of June.
Last July, Ayala raised P10 billion from the issuance of 3.920% fixed-rate bonds due 2023. The issuance is the first tranche of its P20 billion fixed rate bonds program. The bond was rated “PRS Aaa” by the Philippine Ratings Services Corporation and was listed in the Philippine Dealing Exchange. Last June, Ayala declared a cash dividend of P2.88 per share.

Ayala Corporation recorded a net income of P5.8 billion in the first quarter of the year, expanding 15 percent from a year ago, as most of its businesses performed well with largest growth coming from its real estate, power generation, and automotive businesses.

This strong first quarter results was driven by the equity earnings contribution from the conglomerate’s business units, which reached P7.2 billion, 11 percent higher year-on-year. Ayala Land and Manila Water posted double-digit growth in equity earnings contribution, up 16 percent and 13 percent, respectively. Meanwhile, Ayala Automotive rebounded in the first three months of the year with equity earnings contribution expanding fivefold on the back of strong sales in the Isuzu and Honda brands as its Volkswagen sales started to ramp up.

“As we conclude our medium-term plan this year and embark on a new five-year growth strategy, we are encouraged by the upbeat first quarter results of our businesses. We believe the Philippines continues to be fundamentally strong, and we expect most of our businesses to continue growing at a healthy pace,” Ayala president and chief operating officer Fernando Zobel de Ayala said.

Real Estate

Ayala Land registered a 14 percent growth in net income to P4.7 billion on the back of robust residential, office space sales, and commercial leasing segments and higher margins across all product lines. Real estate revenues, inclusive of interest income on accretion, grew 8 percent to P26.7 billion supported by the steady performance of its property development and commercial leasing businesses.

Residential revenues expanded 14 percent to P15.9 billion on higher bookings and project completion. Reservation sales rose 6 percent to P24.7 billion. This was supported by improved revenues from the sale of office space, which jumped 33 percent to P1.3 billion on bookings primarily from Alveo Financial Tower in Makati Central Business District.

Revenues from shopping center and office leasing segments improved during the period on contribution of newly opened malls and office spaces. Shopping center revenues expanded 15 percent to P3.6 billion, while office leasing revenues grew 13 percent to P1.4 billion. Together with hotels and resorts, shopping centers and office leasing, the recurring income business contributed 40 percent of Ayala Land’s net income in the first quarter.

Telecom

Globe Telecom sustained its robust topline growth bolstered by gains across its data-related product
segments, with net income growing 3 percent to P4.3 billion in the first three months of the year.

Globe’s bottomline growth was tempered by the P6.2 billion in depreciation expenses during the period. A 40 percent jump from a year ago, the depreciation expenses resulted from the one-time adjustments from end of useful life of certain assets, the additional depreciation charges from Bayan during the quarter which were not part of the depreciation in the previous year, as well as the depreciation of new assets completed in 2015.

Without the impact of non-recurring charges, foreign exchange gains, and mark-to-market charges,
Globe’s core net income stood at P4.2 billion in the first quarter, flat from a year ago.

Service revenues reached P29.9 billion in the first quarter, a 14 percent improvement from its year-ago level. This strong growth was partly driven by contribution from Bayan amounting to P1.5 billion.

Customer base expansion in both the prepaid and postpaid segments drove the 7 percent growth in mobile revenues, which reached P23.1 billion from a year ago. Globe’s mobile subscribers jumped 18 percent to 57.3 million at the end of the first quarter.

Mobile data service revenues soared 62 percent to P9.1 billion owing to the increasing smartphone penetration and availability of low-priced data capable devices combined with Globe’s attractive offerings and improved data network. This was partly offset by the decline in core mobile voice and SMS revenues by 11 percent and 15 percent, respectively as traffic shifted to data services.

Similarly, Globe’s group home broadband business, which includes Bayan, posted robust growth with revenues expanding 51 percent to P3.5 billion and subscriber base improving 41 percent to 1.1 million. Strong demand for internet and data connectivity combined with its bundled entertainment-related content offerings drove Globe’s home broadband revenues during the period. Globe’s corporate data business likewise soared, climbing 51 percent to P2.3 billion on increased demand for service solutions and cloud-based services from corporate clients.

This translated to a consolidated EBITDA of P13 billion, 18 percent higher year-on-year, with EBITDA
margin at 44 percent, higher than the 42 percent recorded the previous year.

Banking

Bank of the Philippine Islands reported a net income of P5 billion in the first quarter of the year, up 1.3 percent year-on-year as its core lending business, non-interest income, and securities trading continue to improve.

The bank’s total revenues grew 5 percent to P15.3 billion supported by the 6 percent increase in net interest income, which reached P10 billion. Non-interest income improved 2.8 percent to P5.3 billion on combined gains from securities and foreign exchange trading, which grew 22 percent.

BPI’s operating expenses went up 7.3 percent to P7.9 billion, primarily driven by higher regulatory and marketing-related costs. This translated to a slight increase in cost-to-income ratio to 51.4 percent from
50.3 percent a year ago.

The bank’s loan portfolio expanded 18.1 percent to P861.2 billion, comprising 78 percent corporate and
22 percent retail borrowers. Despite the growth in the bank’s loan book, its gross 90-day non-performing loans slightly decreased to 1.7 percent. Meanwhile, total deposits reached P1.3 trillion, 12 percent higher from its year-ago level. Current and savings account at the end of the first quarter stood at 72.6 percent.

This puts BPI’s total assets to P1.5 trillion, up 9 percent year-on-year. The bank’s capital adequacy during the period remains strong, recording a 7 percent increase from the previous year to P156 billion, with capital adequacy ratio at 13.9 percent.

Water

Manila Water registered a 3 percent growth in net income to P1.5 billion in the first three months of the
year on improved East Zone operations, backed by strong topline growth of its domestic businesses.

Billed volume in the Metro Manila East Zone climbed 6 percent owing to the expansion initiatives in the Pasig, Marikina, and Taguig areas. Furthermore, its domestic operations jumped 44 percent to P643 million bolstered by higher connections and upward tariff adjustments particularly in Laguna Water and Boracay Water as well as contribution from Estate Water.

Manila Water’s two bulk water companies in Vietnam, Thu Duc Water and Kenh Dong Water as well as its investment in Saigon Water, grew 4 percent year-on-year. Manila Water’s businesses outside the East Zone, which includes domestic and overseas operations, collectively grew 4 percent, accounting for 15 percent of its net income in the first quarter.

Manila Water continues to improve its operating efficiencies, with non-revenue water in the Metro Manila concession lower at 11.2 percent at the end of the first quarter, a 0.9 percent-point improvement year-on-year. Meanwhile, collection efficiency remained strong in the first three months of the year at
100 percent.

Electronics Manufacturing

Integrated Microelectronics registered a net income of $6.5 million (or P311 million) in the first quarter, a 4 percent decline year-on-year. IMI’s continued shift in revenue mix to new platform technologies drove the 3.2 percent sequential improvements in its consolidated revenues from the fourth quarter of
2015 to $199.1 million (or P9.4 billion) in the first quarter of the year.

This transition reflects IMI’s strategy to exit some of its low-margin consumer electronics businesses and the discontinued products in the computing segment as it ramps up its automotive and industrial products.

IMI’s China operations posted a 3.3 percent decline in revenues to $66.6 million as customer demand on consumer electronics slow down, including phased out models. Its revenues from its Europe and Mexico operations grew 6.4 percent to $73.3 million in the first quarter on higher demand in the automotive segment, mitigating the effect of a weaker euro. Meanwhile, IMI’s revenues from its Philippine operations decreased 2.3 percent to $51.4 million on strong growth in the automotive and industrial segments, which partially filled the revenue gap from computer peripherals.

Power and Transport

AC Energy sustained its positive earnings trajectory, generating a net income of P250 million in the first
quarter as its power projects achieved more efficient operating levels.

AC Energy currently has approximately 650 megawatts in attributable capacity across its conventional and renewable investments. With financial close of the first unit of the 2x660MW GN Power Diningin plant expected in the third quarter of this year, AC Energy is set to achieve its goal of assembling 1,000 megawatts of attributable capacity by the end of 2016.

In transport, AC Infrastructure recorded net earnings of P23 million following the systems takeover of LRT1 in September last year. AC Infrastructure currently has three public-private partnership projects in its portfolio – the 4-kilometer Muntinlupa-Cavite Expressway, the Beep ticketing system, and the extension and operations and maintenance of LRT1.

Balance Sheet

Ayala maintains a comfortable balance sheet that allows it to pursue investments as well as cover its dividend and debt obligations. At end of the first quarter, parent company cash stood at P37.7 billion, putting its net debt-to-equity ratio to 0.43 at the parent level and 0.60 at the consolidated level. Ayala’s loan-to-value ratio, which is the ratio of its parent net debt to the value of its investments, stood at 8.1 percent at the end of the first quarter.

This week, Ayala filed a registration statement with the Securities and Exchange Commission in connection with the issuance of peso fixed rate bonds of up to P20 billion to be issued in one or more tranches. The first tranche of the bonds, which will be used primarily to refinance existing debt, will be issued with a principal amount of P10 billion and tenor of 7 years.

The press statement below pertains to the disclosure submitted to the SEC, PSE, and PDEx by Ayala’s General Counsel, Compliance Officer and Corporate Secretary Solomon M. Hermosura.

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AYALA Corporation’s net income expanded 20 percent to P22.3 billion in 2015, beating its target a year earlier than planned. This was primarily driven by the solid performance of its real estate and telecommunications businesses and lifted by contributions from its power generation unit.

Excluding capital gains primarily from the partial sale of AC Energy’s stake in North Luzon Renewable Energy Corporation in 2015 and from the divestment of Stream Global Services in the previous year, Ayala’s net earnings actually grew 24 percent year-on-year. This robust performance was anchored on higher equity earnings contribution from Ayala’s business units, which reached P28 billion, reflecting a 13 percent increase from the previous year. At the group level, Ayala’s total consolidated revenues, which includes the combined revenues of its subsidiaries and its share in earnings from associates, surpassed the P200 billion-mark, climbing 11 percent from its year-ago level.

“We achieved a number of milestones as a group in the past year, with most of our major businesses continuing to perform well,” Ayala Corporation president and chief operating officer Fernando Zobel de Ayala said. “In 2015, we strengthened our growing portfolio of power and infrastructure investments, with various projects coming to fruition. In addition, we increased our investments in social infrastructure, as we entered the healthcare space and deepened our presence in education.” Mr. Zobel added.

“In particular, in power, we currently have about 600 megawatts of attributable capacity across conventional and renewable platforms as our assets came online and reached more efficient operating levels. In transport infrastructure, we opened the Muntinlupa-Cavite Expressway, launched the Beep ticketing system, and took over the operations and management of LRT1,” Mr. Zobel said.

Real Estate

The sustained performance of its residential and office developments and commercial leasing segments drove Ayala Land’s net income in 2015, which reached P17.6 billion, 19 percent higher year-on-year.

Revenues from the residential business expanded 12 percent to P58 billion on new bookings and project completion. Reservation sales rose 4 percent to P105.3 billion, of which 25 percent account for overseas Filipino buyers. New launches and higher completion of office developments fueled the 32 percent growth in office space sales, which reached P6.4 billion during the year.

The higher occupancy and average rental rates of its shopping centers and office spaces combined with steady improvement of its hotels and resorts portfolio lifted Ayala Land’s commercial leasing revenues, which climbed 16 percent to P24.5 billion.

Ayala Land’s sustained earnings momentum during the year was further supported by the improved margin performance across its product lines as well as efficient cost management measures with earnings before interest and taxes (EBIT) margin at 29 percent from 27 percent a year ago.

Ayala Land continued to build up its recurring income business, with malls, office, and hotels and resorts accounting for 34 percent of its net earnings in 2015.

Ayala Land’s capital spending during the year reached P82 billion. This year, it has earmarked P85 billion to support its pipeline of projects.

Telecom

Globe Telecom posted another record year, with net income surging 23 percent to P16.5 billion buoyed by the solid revenue trajectory from demand for data services across mobile, broadband, and fixed line segments. The P1.2 billion gain from the sale of its 51 percent stake in Yondu Inc. also lifted Globe’s earnings during the year. Core net income, which excludes one-time adjustments, grew 4 percent.

Service revenues jumped 15 percent to P113.7 billion. Mobile revenues grew 9 percent to P85.1 billion on sustained growth in the postpaid segment, up 7 percent, coupled with faster expansion coming from the prepaid segment, up 10 percent. Similarly, mobile subscribers reached 52.9 million at the end of 2015, a 20 percent-increase from the previous year. Postpaid subscribers grew 6 percent, while prepaid subscribers jumped 21 percent. As it continued to roll out infrastructure improvements in its data network, Globe mobile data revenues expanded 55 percent to P22.1 billion.

In its broadband business, which now includes Bayan Telecommunications, Globe’s revenues and subscriber base climbed 38 percent to P17.5 billion and 55 percent to 4.3 million, respectively. Excluding the impact of Bayan’s consolidation in the second half of 2015, Globe’s full year broadband service revenues grew 27 percent year-on-year to P16.1 billion.

EBITDA expanded 17 percent to P45.8 billion, with EBITDA margin steady at 40 percent.

Globe spent about P32.1 billion in capital expenditures in 2015 primarily to support its data infrastructure requirements. This year, it has programmed $700 to $750 million in capital spending to fund its data network initiatives.

Banking

Bank of the Philippine Islands reported net earnings of P18.2 billion in 2015, up 1.1 percent, as the bank’s core lending business continued to drive growth, reducing reliance in securities trading.

BPI’s total revenues rose 6.4 percent to P59.4 billion driven by net interest income, which grew 11 percent to P38.6 billion on the back of higher average asset base. Non-interest income dropped 1.2 percent to P20.7 billion as the bank’s trading performance weathered a volatile year, with foreign exchange and securities trading posting gains of P2.9 billion.

Net loans expanded 9 percent to P872.9 billion, comprising 78 percent corporate and 22 percent retail borrowers. Deposits grew 8.5 percent to P1.3 trillion year-on-year. The bank registered a current and savings account ratio of 72.3 percent. Cost-to-income ratio remained at 53.7 percent, while total assets stood at P1.5 trillion, up 4.6 percent from a year ago.

Despite the increase in its loan portfolio, the bank maintained strong asset quality and remained well capitalized with gross 90-day non-performing loans (NPL) level at 1.6 percent of total loans in the fourth quarter of 2015 from 1.8 percent in the previous quarter. BPI’s loan loss cover stood at 110.2 percent, excluding the value of collaterals. BPI ended the year with total capital of P150.3 billion, net of cash dividends declared, 4.3 percent higher than the previous year. This resulted in BASEL III capital adequacy ratio of 13.6 percent at the end of 2015.

Water

As it ramps up its businesses outside Metro Manila, Manila Water posted a 2 percent-growth in consolidated net income to P6 billion. Revenues rose 4 percent to P16.9 billion backed by a 2 percent growth in billed volume.

Earnings contribution from non-East Zone investments rose 46 percent, accounting for 16 percent of Manila Water’s net income during the year. Billed volume of its domestic units, which include Boracay Water, Clark Water, Laguna Water and Cebu Manila Water Development, climbed 30 percent. Manila Water’s investments in Vietnam, which include bulk water companies Thu Duc Water and Kenh Dong Water and a stake in Saigon Water, contributed P404 million in net income, up 13 percent from the previous year.

In the East Zone, Manila Water expanded its coverage areas in Pasig, Taguig, Marikina, and Rizal, resulting in a 3 percent growth in billed volume, balancing out the impact of the tariff reduction.

Manila Water continues to expand its portfolio of businesses. In January, it signed an agreement with Ayala Land to provide water and used water services to all its developments nationwide. In addition, its 5-gallon bottled water product under the brand name “Healthy Family” opened three new plants in the fourth quarter of 2015 with a combined capacity of 43,000 bottles per day.

Electronics Manufacturing

Integrated Micro-Electronics Inc. reported a flat net income of $28.8 million (or P1.3 billion) year-on-year, owing to the volatility in the foreign currency markets and weakness in China’s economy, one of its largest markets. Enhanced portfolio mix and cost efficiency initiatives across IMI’s operations covered for the softness in revenues.

Revenues of $814.4 million (or P37 billion) dropped 4 percent from a year ago mainly due to a weak euro and downturn in the computing and telecommunications segments. Excluding the impact of changes in currency exchange, automotive revenues climbed 21 percent, while total revenues rose 2 percent.

The revenue headwinds were offset by IMI’s strong volume growth in the automotive segment. IMI’s China operations recorded $279.3 million in revenues during the year, a 14 percent decline from the previous year as the 4G telecommunications network rollout in China reaches its projected volume coupled with a slowdown in the consumer electronics segment.

IMI’s Europe and Mexico operations ended flat, with combined revenues of $267.4 million as a result of weakness in the euro. IMI’s electronics manufacturing services operations in the Philippines posted $225.3 million in revenues, a 10 percent growth from a year ago due to a strong demand for automotive cameras and security and access control devices.

Energy and Infrastructure

AC Energy Holdings recorded a net income of P2.1 billion during the year as its power generation assets came online and achieved more efficient operating levels. Furthermore, it realized gains from the partial sale of its stake in North Luzon Renewable Energy Corporation, an 81-megawatt wind farm in Ilocos Norte.

AC Energy currently has an attributable capacity of approximately 600 megawatts in its portfolio among conventional and renewable power projects currently in operations and under construction. It expects this capacity to reach close to 1,000 MW by 2016 once the first phase of its 2×660 GN Power plant in Dinginin, reaches financial close. In renewable energy, AC Energy’s 18 MW solar power farm, Monte Solar Energy Inc., started commercial operations in February. In conventional energy, the second 135 MW unit of its thermal plant, South Luzon Thermal Energy Corporation in Calaca, Batangas, also started commercial operations in February. In addition, the first unit of its 4×138 GN Power plant in Kauswagan is expected to be completed in the fourth quarter of 2017.

In transport infrastructure, AC Infrastructure Holdings continued to move forward with its public-private partnership projects. AC Infrastructure, through Light Rail Manila Corporation, successfully took over the operations of the LRT1 last September and has since increased the number of operational light rail vehicles (LRVs) by about 15 percent. Its automated fare collection system under AF Payments, Inc. now has over 1.5 million Beep cards in circulation today. Meanwhile, AC Infra’s Muntinlupa Cavite Expressway (MCX) started operations last July and is currently serving over 22,000 vehicles per day, helping motorists save over 30 minutes in travel time.

Balance Sheet and Capital Expenditures

Ayala parent company ended the year with gross debt of P93.6 billion, 7 percent lower than the previous year, and cash of P47.4 billion. Its balance sheet remains healthy with parent company net debt to equity ratio at 0.44 to 1 and consolidated net debt to equity ratio at 0.55 to 1.

For 2016, Ayala has set aside P22.4 billion in capital spending at the parent level mainly to fund its pipeline of power generation projects. At the group level, Ayala has earmarked P174 billion in combined capital expenditures primarily to support the growth strategy of its real estate and telecom units.

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Light Rail Manila Corporation (LRMC) announced the simultaneous signing today of a P24 billion loan facility and the engineering, procurement and construction (EPC) agreement for LRT 1 Cavite Extension, one of the country’s largest private-public partnership projects.

LRMC is the joint venture company of Metro Pacific Investments Corporation’s Metro Pacific Light Rail Corporation, Ayala Corporation’s AC Infrastructure Holdings Corporation, and the Philippine Investment Alliance for Infrastructure’s Macquarie Infrastructure Holdings (Philippines) PTE Ltd.

“These milestone agreements give us significant headway towards the construction and commissioning of the much-awaited Cavite Extension which will benefit an additional 300,000 passengers from four big cities in southern Manila,” LRMC President and Chief Executive Officer Jesus P. Francisco said.

LRMC signed the 15-year Omnibus Loan and Security Agreement (OLSA) with Metropolitan Bank & Trust Company (Metrobank), Security Bank Corporation and Rizal Commercial Banking Corporation (RCBC), with PhP15.3 billion of the total loan amount allocated for the Cavite Extension and PhP8.7 billion for the rehabilitation of the existing LRT 1 system.

Francisco said that LRMC and its EPC contractors Bouyges Travaux Publics and Alstom Transport are set to commence the construction of the 11.7 kilometer Cavite Extension once right of way is delivered by the Department of Transportation and Communications (DOTC) and Light Rail Transit Authority (LRTA). “Hopefully by the second half of this year,” he added.

Targeted for completion in about four years after the delivery of right of way, the 11.7 kilometer Cavite Extension will connect into the Existing System immediately south of the Baclaran Station and run in a generally southerly direction to Niyog, Cavite. It will consist of elevated guideways throughout the majority of the alignment, except for the guideway section at Zapote which will be located at grade and consist of the Satellite Depot and New Station.

Eight new stations will be provided with three intermodal facilities across Pasay City, Paranaque City, Las Pinas City and Cavite. The new stations are Aseana, MIA, Asia World, Ninoy Aquino, Dr. Santos, Las Pinas, Zapote and Niyog. The intermodal facilities shall be located at Dr. Santos, Zapote, and Niyog.

The commercial speed of the Cavite Extension will be 60km/h. The horizontal alignment shall be designed for a train speed of 80km/h for the mainline track; 6okm/h through Stations; and 30km/h for secondary and Depot tracks.

The new stations will be accessible to and from nearby community facilities such as shops, schools, stadium, park, etc, and be located to suit passenger flow routes from residential areas.

Pedestrian access to all new stations will be direct, safe and easy. Details such as lighting to distinguish access points, pedestrian cross striping and curb cuts for handicapped access will be provided.

Bouygues Travaux Publics, which will provide the railway infrastructure for the Cavite Extension, is known globally for complex projects involving tunnels, engineering structures and road, port and rail infrastructure, most recent of which were the Hong Kong–Zhuhai–Macao Bridge, the Port of Miami Tunnel and the Nîmes-Montpellier rail bypass in France.

Alstom Transport, on the other hand, will undertake the railway systems work, including track work, power supply, train control and signaling system, communications systems and the construction of the Operations Control System to provide seamless operation between the Existing System and the Cavite Extension.

The sustained earnings momentum of its telecommunications, real estate and banking units, including capital gains realized in the third quarter, drove Ayala Corporation’s net earnings in the first nine months of the year to P17.7 billion, 26 percent higher than a year ago.

In the third quarter alone, Ayala registered a net income of P7.3 billion, representing a 72 percent increase year-on-year.

Excluding the capital gains primarily from the partial sale of AC Energy’s stake in North Luzon Renewable Energy Corporation this year and the divestment of Stream Global Services in the previous year, Ayala’s nine-month earnings recorded robust growth of 23 percent from a year ago.

This solid performance was underpinned by the strong double-digit growth in equity earnings contribution from Ayala’s business units, which reached P21.4 billion, 14 percent higher than its year-ago level.

“Our growth trajectory remains strong as we continue to be optimistic about the overall domestic environment,” Ayala President and Chief Operating Officer Fernando Zobel de Ayala said.

Real Estate
Ayala Land’s net income for the first nine months of the year expanded 19 percent to P12.8 billion fueled by the sustained growth in residential development, office sales, and commercial leasing segments. Real estate revenues rose 10 percent to P70.2 billion.

Revenues from residential development grew 10 percent to P40 billion on higher bookings and project completion, while new launches boosted office sales to P4.0 billion, 57 percent higher year-on-year. Residential sales reached P82.9 billion as of September 2015.

In commercial leasing, higher occupancy and average rental rates drove the 12 percent increase in shopping center revenues to P9.2 billion and the 18 percent improvement in office revenues to P3.7 billion. Hotels and resorts revenues posted a 7 percent increase to P4.3 billion.

The strong performance of its commercial leasing segment supported Ayala Land’s continued buildup of its recurring income business which contributed 46 percent of its net income during the period.

Ayala Land launched various residential, office for sale and leasing projects amounting to P97.9 billion during the period.

Banking
Bank of the Philippine Islands registered a net income of P13.8 billion, 8 percent higher than the previous year as its core banking business continues to grow at a healthy pace. Total revenues expanded 9 percent to P44.1 billion in the first nine months of the year, driven by net interest income and non-interest income, which expanded by P3 billion and P683 million, respectively. Comprehensive income rose 12.3 percent to P13.3 billion.

BPI’s operating expenses reached P22.9 billion, 6.7 percent higher than the previous year. This translated to an improved cost-to-income ratio of 51.9 percent from the previous year’s 53.1 percent.

The bank’s total loan portfolio expanded 11.2 percent, reaching P780 billion during the period. Corporate loans accounted for 76.6 percent, while retail loans comprised 23.4 percent of BPI’s lending portfolio. Total deposits expanded 13.3 percent to P1.2 trillion, while total assets rose 8.8 percent to P1.4 trillion from their year-ago levels.

The bank recorded a capital adequacy ratio of 14.9 percent compared to the 15.7 percent registered a year ago.

Telecom
Globe Telecom sustained its solid performance in the first nine months of the year, recording a net income of P14.1 billion, 34 percent higher year-on-year. This was driven by strong growth in service revenues, which expanded 15 percent to P83.4 billion, buoyed by robust demand for data services across mobile, broadband, and fixed line segments. The P1.2 billion gain from the sale of its 51 percent stake in Yondu Inc. boosted Globe’s earnings during the period. Excluding one-time gains this year and the impact of accelerated depreciation in 2014, Globe’s core net income for the nine-month period grew 10 percent from a year ago.

Demand for data services continued to drive Globe’s strong revenue growth. Mobile browsing revenues jumped 48 percent to P15.1 billion, while broadband revenues increased 37 percent to P12.4 billion. Revenues from fixed line data surged 37 percent to P5.5 billion.

Globe’s mobile subscribers increased 17 percent to 50.1 million, surpassing the 50 million mark for the first time in the company’s history, while its broadband subscribers surged 57 percent to nearly 4 million.

Following the conversion of debt and acquisition of equity from existing shareholders last July, Globe now owns 98.6 percent of Bayan’s equity. Since then, Globe and Bayan jointly filed for the latter’s exit from financial rehabilitation. Globe’s acquisition of Bayan presents synergy opportunities, including the nearly P1.4 billion in both one-time and annual recurring savings from one-time capex avoidance, recurring operational expense savings, and cross-selling and up-selling of Globe and Bayan products.

Water Utilities
Manila Water recorded net earnings of P4.6 billion in the first nine months of the year, growing 1 percent from the same period last year. In the third quarter alone, its net income expanded 13 percent year-on-year to P1.6 billion on continued growth of the East Zone concession and higher contribution of its other businesses. Manila Water’s businesses outside the East Zone grew 3 percent, accounting for 12 percent of its consolidated net income.

Total billed volume rose 2 percent. In the East Zone alone, billed volume also grew 2 percent, while the combined billed volume of Manila Water’s local subsidiaries which includes Laguna Water, Boracay Water, Clark Water, and Cebu Manila Water, expanded 31 percent during the period.

Manila Water continues to expand its presence outside Metro Manila. Recently, through a subsidiary, it signed an agreement to operate the water supply system in Cu Chi District in Vietnam. It also entered into an agreement for a demonstration project to reduce non-revenue water in Bandung City, Indonesia.

Electronics Manufacturing
Integrated Micro-Electronics Inc. posted a net income of $22 million in the first nine months of the year, up 5 percent year-on-year on the back of operational efficiency improvements combined with the expansion of its automotive programs.

IMI’s revenues declined 4 percent to $621 million owing to weakness in Euro coupled with a weak China economy which impacted its computing and consumer segments.

IMI’s Europe and Mexico operations recorded combined revenues of $204 million for the nine-month period, a 1 percent growth year-on-year as the robust automotive growth was offset by the effect of currency weakness. Revenues from its electronics manufacturing services unit the Philippines was steady at $168.5 million, while its China operations declined 13 percent to $214.3 million as the country’s 4G rollout reached its projected volume and as the weaker economy adversely affected the consumer electronics customers.

Power Generation and Transport Infrastructure
AC Energy Holdings registered a net income of ?1.6 billion in the first nine months of the year as its power generation assets achieved more efficient operating levels, and as it realized a gain from the partial sale of its stake in North Luzon Renewable Energy Corporation, an 81-megawatt wind farm in Ilocos Norte.

AC Energy continues to expand its renewable energy portfolio. It recently entered into a partnership agreement with Bronzeoak Clean Energy Inc. for the development, construction and operation of a P1.3 billion-solar power farm in Bais City, Negros Oriental. The solar power farm will have a capacity of approximately 18 megawatts in the first phase with target completion in March 2016. The second phase involves the expansion of the solar power farm to up to 50 megawatts.

In transport infrastructure, AC Infrastructure continued to move forward with its public-private partnership projects. AC Infra, through Light Rail Manila Corporation, the concessionaire for the operations, maintenance and extension of LRT 1, took over the operations of the LRT Line 1 last September and has begun to introduce station rehabilitation and improvements. Its toll road, the Muntinlupa Cavite Expressway, has likewise started full commercial operations last July and has steadily ramped up traffic, while its automated fare collection systems project under AF Payments, Inc. has completed the roll out of its Beep cards on LRT lines 1 and 2 and MRT 3 with take-up hitting past the 1 million mark.

Balance Sheet
Ayala maintains a healthy balance sheet. Consolidated net debt to equity ratio stood at 0.53 to 1 as of September 30, 2015. Parent company cash reached P43.3 billion, putting its net debt to equity ratio at 0.41 to 1 and 0.21 to 1, if including its share from the undistributed earnings from its investee companies.

Light Rail Manila Corporation (LRMC ) the concessionaire for the operations, maintenance and extension of LRT1, of which AC Infrastructure Holdings Corp., a wholly owned subsidiary of Ayala Corporation has a 35% stake, took over the operations and maintenance of the LRT Line 1 from the Light Rail Transit Authority and Department of Transportation and Communications on September 12, 2015.

LRMC is the concessionaire for the operations, maintenance and extension of LRT1. It will operate and maintain LRT1 for 32 years. Once LRMC extends LRT1, the system will stretch 32.4 kilometers (from its current 20.7 kilometers) from Muñoz, Quezon City to Bacoor, Cavite (from its current endpoint at Baclaran). LRT1 serves approximately half a million passengers today. The extension will serve future high growth centers in the South like Cavite.

LRMC is taking over a train system that is severely deteriorated. It is the oldest train line in Metro Manila where maintenance has been a challenge over the past years. Out of the 100 Light Rail Vehicles (LRVs) committed to be delivered to LRMC upon take-over, only approximately 77 of the LRVs are in running condition. It will take time to fix the fleet and restore the system to optimal operating levels. The real benefit of an improved train system will not be felt by the riding public immediately but will come in due course particularly when the new trains are delivered by the government as part of its obligations under the Concession Agreement, which trains are scheduled to arrive in 2017, barring any delays. This notwithstanding, LRMC is committed to improve the public’s riding experience over time and gradually bring the LRT 1 system to better operating levels. Particularly, LRMC will begin works starting with improvements in the facilities on all the stations for the safety and security of customers. Nine of the eleven substations are also in line for rehabilitation to help ensure more reliable train services.

Ayala Corporation Chairman & CEO, Mr. Jaime Augusto Zobel de Ayala said, “We are excited to work with our partners MPIC, Macquarie, the DOTC and the LRTA. Both the government and the private sector have commitments to meet under the concession framework. It is imperative that we work together to ensure the successful delivery of this project for the benefit of the riding public.”

“After months of preparation, we are pleased to take on the operations of LRT 1,” said Manuel V. Pangilinan, the Chairman of LRMC. “We consider the DOTC and LRTA to be our partners in this project, and will work to improve the Line over time, and make it a system that our commuters will not only enjoy riding, but one they can be truly proud of.”

LRMC is owned by Light Rail Manila Holdings, Inc. (LRMH), Metro Pacific Light Rail Corporation (MPLRC), and Macquarie Infrastructure Holdings (Philippines) Pte. Limited. LRMH is jointly owned by MPLRC, a wholly-owned subsidiary of Metro Pacific Investments Corporation, and AC Infrastructure Holdings Corporation, a wholly owned subsidiary of Ayala Corporation.

AC Energy Holdings, Inc., a wholly owned subsidiary of Ayala Corporation, signed on September 8, 2015 a Subscription and Shareholders’ Agreement with Bronzeoak Clean Energy Inc., the investment arm of Bronzeoak Philippines Inc., for the development, construction and operation of a solar power farm in Bais City, Negros Oriental. The project will be owned and operated by Monte Solar Energy Inc. (MonteSol), a special purpose vehicle company, and shall be undertaken in two phases. The first phase is for an 18 MW solar power plant with a total project cost of P1.3 billion and is targeted for completion by March 2016. The second phase is for the expansion of the initial 18 MW solar power plant to up to 40 MW.

Bronzeoak was the developer and is managing shareholder of the 45 MW San Carlos Solar Energy (SacaSol) project, the country’s first and largest solar farm, inaugurated by President Benigno S. Aquino III in May of 2014. Sacasol was the first ever renewable energy project that was awarded feed-in-tariff under the Philippine FiT System.

AC Energy President and CEO John Eric Francia said, “We are excited to pursue this opportunity and expand our renewable energy assets in line with our broader objective to create a balanced energy portfolio. This project serves as a good entry platform for our investment in solar power, particularly as technology costs have dramatically improved over the past few years.”

Bronzeoak President Jose Maria P. Zabaleta said, “Montesol is part of Bronzeoak’s development portfolio of 202 MW of solar projects now in operation or under construction, and we couldn’t be any more excited to be welcoming a partner like AC Energy into MonteSol and into the solar power sector.”

“Renewable energy brings reliable and clean power to the countryside to accelerate our nation’s sustainable development,” added Montesol President Xavier P. Zabaleta, “And the investment of AC Energy will only accelerate the ongoing rapid development of Negros. Investments like these have been made possible by the strong leadership and project support of the provincial governors of Negros and the local governments of Bais, San Carlos, La Carlota and Manapla.”

On September 2, 2015, Ayala International Holdings, Ltd., a wholly owned subsidiary of Ayala Corporation, sold its ownership interest in Luzon Wind Energy Holdings B.V. (“Luzon Wind”) to DGA NLREC B.V.

Luzon Wind owns part of Ayala’s stake in North Luzon Renewable Energy Corp. (“NLREC”), being held by its wholly owned subsidiary AC Energy Holdings, Inc. NLREC owns and operates an 81MW wind farm in Barangay Caparispisan, Pagudpud, Ilocos Norte.

After the sale of Luzon Wind, AC Energy Holdings, Inc. still remains the largest owner of NLREC with an economic stake of approximately 36%.

DGA NLREC B.V. is a wholly owned subsidiary of Mitsubishi Corporation.

Ayala and Mitsubishi Corp. have been partners since 1974, when they signed an agreement to jointly explore investment opportunities in the Philippines.