Author: administrator

At a meeting held today, December 12, 2012, the Board of Directors of Bank of the Philippine Islands (BPI) approved a succession plan recommended by its Nomination Committee and Personnel and Compensation Committee. Cezar P. Consing will be nominated to succeed Aurelio R. Montinola III as President and CEO at the next organizational meeting of the Board immediately following the stockholders’ meeting scheduled on April 18, 2013. This movement is in line with the traditional retirement practices in BPI and forms part of the normal succession process.

Consing has over 25 years of experience in international finance, particularly in investment banking, commercial banking, and private equity. He has led large groups of highly qualified finance professionals and has managed and grown complex businesses in highly competitive environments. He has also been directly involved in several significant financial transactions in Asia and in the Philippines.

Consing’s involvement with Bank of the Philippine Islands started in 1981 when he became the youngest management trainee in the corporate planning department and later moved to corporate banking, where he eventually headed the Conglomerate and Multinational Coverage team. He was appointed Assistant Vice President in corporate banking in 1985. He then joined J.P. Morgan & Co. as a transferee from BPI and built a 20-year career in investment banking while based in Hong Kong and Singapore, the last seven years of which as head or co-head of investment banking for Asia Pacific between 1997 and 2004. From 2001, he was president of J.P. Morgan Securities (Asia Pacific) Ltd. and had overall responsibility for the combined Asian investment banking businesses of J.P. Morgan, Chase Manhattan, and Jardine Fleming.

At the board level, Consing represented J.P. Morgan on the Boards of Directors of BPI and BPI Capital in 1995 to 2000. He rejoined the BPI Board as an independent director from 2004 to 2007, and then again, in 2010, where he currently serves as an independent director and a member of its personnel and risk management committee.

Since 2004, Consing has been a partner of The Rohatyn Group, a US$3 billion international hedge fund and private equity firm focused exclusively on the emerging markets. He runs the firm’s Hong Kong office and is responsible for its private equity business in Asia, including oversight of the firm’s two joint ventures in the region, Arch Capital in Hong Kong, and CapAsia in Singapore. He has also served as independent board director of CIMB Group Holdings, CIMB Group Sdn Berhad in Malaysia, and CIMB Securities International in Singapore, as well as of First Gen Corporation (since 2005) and Jollibee Foods Corporation (since 2010). He previously served as member of the advisory board and executive committee of Asian Youth Orchestra.

Consing, 53, earned a degree in Economics (accelerated program, magna cum laude) from De La Salle University in 1979, and a master’s degree in Applied Economics from the University of Michigan in 1980.

Says BPI Chairman Jaime Augusto Zobel de Ayala, “After an extensive search process, we are very pleased to announce the selection of Cezar (Bong) Consing as the ideal candidate to lead the Bank of the Philippines Islands in this increasingly complex financial market environment. His extensive experience in international banking and financial services, combined with his knowledge of BPI over a large span of years, will be an exciting addition to our exceptional management team.”

From now until April 2013, Consing and Montinola will be working together to ensure a smooth transition in the management of the bank. Montinola will continue to serve as a member of the board of BPI upon the transition in April.

The above statement pertains to the disclosure made today, December 12, 2012, to the Securities and Exchange Commission and Philippine Stock Exchange, by BPI corporate secretary Carlos Aquino.

Two of the country’s largest business groups, Ayala Corporation (Ayala) and Aboitiz Equity Ventures, Inc. (AEV) through its subsidiary AboitizLand, have together signed a Memorandum of Understanding with ADC & HAS Airports Corporation (ADC&HAS) to form a consortium that will participate in the planned public bidding of the Mactan-Cebu International Airport (MCIA) Passenger Terminal under the Philippine government’s Public Private Partnership (PPP) Program.

ADC&HAS is a global airport operator with a proven track record of successful investment, development and operation of airports around the world. It currently operates airports serving the capital cities of Quito, Ecuador and San Jose, Costa Rica with an annual capacity of over 5 million passengers and over 3.6 million passengers, respectively. It also operates airports in the growing tourist destinations of Liberia, Costa Rica and the Chungcheong Northern Province in SouthKorea.

ADC&HAS combines the operational strength and technical resources of the Houston Airport System (HAS) and the airport privatization and development experience of Airport Development Corporation (ADC). HAS operates three airports in the United States that handle an aggregate capacity of nearly 50 million passengers annually, making it North America’s fourth largest airport operator.

AEV President & CEO Erramon Aboitiz said, “By partnering with ADC&HAS, we are bringing on board one of the most dynamic developers and operators of airports in the world today. ADC&HAS has been at the forefront of airport and commercial development for over 40 years, spearheading landmark airport privatizations in Canada, Hungary, Ecuador, Costa Rica, and just recently in Korea. Coupled with the technical resources from HAS, the world’s 6th largest airport system, we’re confident that our alliance with ADC&HAS will allow us to develop a world-class airport facility in Mactan that all Filipinos will be proud of.”

Ayala President & Chief Operating Officer Fernando Zobel de Ayala, for his part, said, “We are very excited to partner with ADC&HAS in the bid for the Mactan Airport. Their experience and success in building and operating world-class airports in multiple emerging markets under a PPP concession framework make them a highly suitable partner for a project like this. We believe their expertise in airport operations together with the combined strengths of the Aboitiz and Ayala groups can offer the opportunity to significantly increase the standards of airport operations in the country. We believe that Mactan can become an even more important international gateway to southern Philippines.”

ADC&HAS President & CEO Jeffrey Schefferman noted, “We are extremely pleased to partner with Ayala and Aboitiz and are delighted at the prospect of becoming part of a very exciting future in the continued development of Cebu and the Central Visayas region. As we recognize the importance of this project for the Philippines, we were very focused and deliberate in our initial due diligence process as we wanted to ensure that our consortium brought to bear the full range and depth of experiences and the financial wherewithal required to achieve success over the long-term. We are certainly excited to move forward in this PPP process.”

The Mactan-Cebu International Airport New Passenger Terminal project is one of the PPP projects recently approved by the National Economic Development Board (NEDA). The project involves the construction of a new passenger terminal and renovation of the existing terminal. It is reportedly scheduled for bidding in the coming months.

Ayala Corporation’s consolidated net income in the first nine months of the year reached P8.7 billion, 19% higher than in the same period last year. Core net income, which excludes the impact of the accelerated depreciation from its telecom unit and revaluation gains realized at its international property unit last year, reached P9.3 billion up 31% year-on-year.

The conglomerate’s strong earnings growth was driven by robust equity earnings from its core and non-core businesses, which reached P11.1 billion in the first nine months, a 21% increase year-on-year. This was driven by its property, banking and water businesses which offset the decline in equity earnings from its telecom business. Significant improvement in equity earnings of its international businesses also helped boost equity earnings in the first nine months.

The strong earnings momentum over the past quarters has pushed share price up 49% year-to-date, outpacing the market’s 28% rise. Shares of its listed business units have likewise increased substantially over the period as they consistently delivered a solid earnings trajectory year-to-date.

REAL ESTATE

Ayala Land’s 9-month net income reached P6.6 billion, 27% higher year-on-year driven by strong revenues across all business lines. Total revenues grew by 20% to P39 billion with its property development business up 27% year-on-year on higher bookings and continued completion of projects. Its commercial leasing business grew by 19% to P6.3 billion with contribution from new malls, higher occupied office gross leasable area, and higher lease rates. Revenues from its construction and property management business surged by 40% to P14.6 billion on the back of brisk residential, office, and mall projects. In the meantime, its hotels and resorts business also rose by 11% year-on-year to P1.8 billion. Ayala Land continues to have a robust pipeline of projects for launch in the fourth quarter which includes 12,000 residential units, 117,000 square meters of shopping centers, and nearly 20,000 square meters of office GLA. It continues to position for strategic land banks within and outside Metro Manila. The company recently acquired the 74-hectare FTI property in Taguig which is strategically located near the country’s two premier business districts, the Makati CBD and Bonifacio Global City. The company’s capital expenditure this year is projected to reach a record P70 billion for both land acquisition and project completion.

BANKING

The Bank of the Philippine Island’s (BPI) 9-month net income grew by 37% to P13.2 billion. This was driven by an 18% growth in revenues as net interest income increased by 8% while non-interest income increased by 34% due to higher securities trading gains. Net interest income grew with the expansion in average asset base while net interest spreads remained relatively stable. The bank’s strong loan growth was sustained in the third quarter. Corporate and consumer loans continued their double-digit expansion, growing by 18% and 16%, respectively. Asset quality remained very healthy with net 30-day NPL ratio at 1.7%. Operating expenses increased at a very manageable rate with much of the increase arising from technology-related costs. BPI’s performance in the first nine months of the year translated to a return on equity of 19.2%.

TELECOM

Globe Telecom’s upward momentum was sustained with 9-month core net income up by 7% year-on-year to P8.8 billion. However, considering the increase in operating expenses and subsidy and the impact of the accelerated depreciation from its network modernization program, reported net income declined by 15% to P6.8 billion. Top-line growth, however, remained strong with service revenues reaching an all-time high of P61.3 billion, 6% higher than same period last year. This was driven by strong mobile, fixed line data and broadband growth which offset the decline in fixed line voice revenues. Mobile revenues rose by 6% to P49.9 billion while fixed line data and broad band revenues expanded by 9% and 14%, respectively. Total mobile subscriber base grew by 10% year-on-year breaching the 32 million mark driven by the continuous growth of both postpaid and prepaid segments. Its broadband subscribers also hit a record high of 1.6 million. Globe’s network modernization program is on track with 62% completion rate in various cell sites all over the country. Globe continues to roll-out in key areas and cover critical business districts such as Metro Davao, Metro Cebu, Quezon City and now moving in Makati City and Rockwell with target completion by November 2012. With very encouraging results, this puts Globe closer to delivering its 2012 capacity plans and network quality improvements for superior customer experience. Modernization of cell sites is accelerating through the fourth quarter of this year and is targeted to be complete by the first quarter of next year.

WATER

Manila Water Co., Inc. recorded a net income of P3.9 billion in the first nine months of the year, up 26% versus last year. Core net income, which excludes non-recurring expenses, also grew by 26% to P4.2 billion. The growth was driven by a 22% increase in revenues as a result of the steady rise in billed volume plus the timely implementation of the tariff adjustment and the contribution of new businesses outside the east zone. Its operating subsidiaries including Laguna, Boracay, Clark and Thu Duc Water in Vietnam contributed about 5% of total revenues and net income. Manila Water continues to expand operations outside the east zone. Following its recent acquisition of a 47.35% stake in Kenh Dong Water Supply Joint Stock Company in Vietnam, it recently signed a share purchase agreement to acquire 51% equity stake in Palyja, a water supply concession in Western Jakarta which serves a population of close to 6 million, nearly the size of its east zone concession in Manila. The transaction is still subject to government and regulatory approval and is expected to be closed within 180 days from its signing date last October 18, 2012.

INTERNATIONAL BUSINESSES

Ayala’s international businesses continued to improve despite lingering uncertainties in the global economy.

Its electronics business, Integrated Microelectronics, Inc. recorded a three-fold improvement in earnings in the first nine months of the year to US$5 million as revenues rose by 18% despite the weakness in developed economies as well as a slowdown in China. Revenues from its new subsidiaries in Europe and Mexico as well as contribution from another subsidiary, PSi Technologies, Inc., helped lift revenues during the period.

Its BPO unit, LiveIt, achieved continued growth and margin improvement. Share of revenues reached US$251 million, up 8% year-on-year, while share of EBITDA reached US$22 million, up 41% due to improved profitability at Stream, Integreon, and Affinity Express. As a result, LiveIt reduced its net loss, which were primarily due to acquisition related charges and other non-operating items.

Ayala Corporation Chairman and Chief Executive Officer, Mr. Jaime Augusto Zobel de Ayala, said: “We are pleased with the earnings performance of each of our core businesses and the continued improvement in profitability of our international units. Their combined performance to-date keeps us on track with our year-end targets. The positive momentum in the domestic economy continues to present opportunities for us to build on the trajectory of our core businesses and aggressively expand in these sectors. As our core businesses remain a steady source of earnings and cash flow, we also continue to optimize our portfolio to maximize value and actively invest in new sectors such as power and transport infrastructure to build a platform for long-term growth.”

Ayala parent company ended the period with gross debt of P49 billion and cash of P29 billion. After it issued a 10-billion peso 15-year corporate bond last May and placed P6.45 billion worth of treasury shares in July, the company is set to issue P8-10 billion worth of fixed rate bonds this month in preparation for significant size investments. Last October, the company acquired an additional 10.4% stake in BPI from strategic partner DBS Bank Ltd. On top of this acquisition, Ayala has deployed roughly P4 billion to date in various development projects in power generation and transport infrastructure as well as in other projects of its existing business units.

This press statement refers to the disclosure submitted to the SEC, PSE, and PDEx by Ayala chief finance officer Delfin C. Gonzalez, Jr.

Volkswagen AG, Europe’s largest carmaker, has chosen to partner with one of the Philippines’ largest and most respected business groups, Ayala Corporation. In a statement issued from its headquarters in Wolfsburg, Germany, Volkswagen announced the appointment of Ayala’s wholly owned subsidiary, Ayala Automotive Holdings Corporation, as the Philippine distributor for Volkswagen passenger vehicles. This distributorship agreement brings together two premier corporate names to compete in an industry with high growth potential.

Ayala Corporation President & COO Fernando Zobel de Ayala noted, “We are very excited to bring Volkswagen’s technology and engineering expertise to the Philippine market. This partnership will no doubt enhance our current portfolio of auto brands given the dominant position of Volkswagen in the global automotive market. This will allow us to offer a much wider range of passenger vehicles in the local market, which will reinforce further Ayala’s strong presence in the local automotive industry.”

Weiming Soh, President, Commercial Operations, Greater China/ASEAN, Volkswagen AG, commented, “We are pleased to announce that Volkswagen has selected the Ayala Group as our future partner to distribute Volkswagen passenger vehicles in the Philippine market. Building on the Ayala Group’s excellent reputation and market knowledge, we are excited about offering consumers in the Philippines Volkswagen’s outstanding line-up of vehicles and providing them with an unparalleled level of sales and service experience. As an important part of Volkswagen’s ASEAN growth strategy, we, jointly with the Ayala Group, plan to rapidly and robustly establish the brand Volkswagen in the Philippines, contributing to our vision to become the world’s number one car manufacturer by 2018.”

The Volkswagen Group is the world’s second largest automobile manufacturer as of 2011, with global sales of 8.265 million units accounting for a 12.3% share of the passenger car market. Volkswagen has 99 production plants in 27 countries. As of the end of December 2011, Volkswagen has more than 500,000 employees worldwide and Volkswagen vehicles are sold in 153 countries.

Ayala Corporation has diversified business interests in the Philippines and is a leading player in real estate development, banking and financial services, telecommunications, water infrastructure development, electronics manufacturing, and business process outsourcing. It has recently entered new sectors with investments in power generation and transport infrastructure development.

The above statement pertains to the disclosure made on October 24, 2012, to the Securities and Exchange Commission, Philippine Stock Exchange, and Philippine Dealing and Exchange Corporation, by Ayala CFO Delfin Gonzalez, Jr.

Ayala Corporation (Ayala) announced that it entered into an agreement with DBS Bank Ltd. (DBS) to acquire part of the common shares held by DBS in the Bank of the Philippine Islands (BPI). Under the agreement, Ayala will purchase the BPI shares from DBS for a total of P 25.6 billion. The acquisition will result in a 10.4% increase in Ayala’s ownership stake in BPI.

DBS has been a strategic investor in BPI since 1999 and is one of the bank’s major shareholders with a 20.3% effective interest. This partial divestment is in line with DBS’ disciplined capital management and strengthens its capital position ahead of the introduction in Singapore of Basel III in 2013. The transaction enables DBS to maintain a meaningful exposure in BPI, which it deems to be an attractive investment, in a capital-efficient manner.

Ayala Chairman and CEO Mr. Jaime Augusto Zobel de Ayala noted that “DBS has been and will continue to be a valuable strategic partner in the governance and management of BPI. They have been a significant part of many of the bank’s milestones and achievements for over a decade. We look forward to continuing this partnership with them in succeeding years.”

Following the acquisition, Ayala’s effective ownership in BPI will increase from 33.6% to 44.0%, while DBS will retain a 9.9% effective ownership and will continue to be represented in the BPI board.

Ayala President and Chief Operating Officer, Mr. Fernando Zobel de Ayala said, “We believe this is a value and earnings accretive acquisition for Ayala given our view on the growth trajectory of the bank over the medium term. This reflects our confidence in the growth potential of BPI particularly amidst the projected expansion of the Philippine economy over the next few years. As a holding company we always look for ways to strengthen our portfolio and take advantage of opportunities that will enhance the value of our holdings while also continuing to ensure the stability of the shareholder base in each of our business units.”

Ayala’s Chief Finance Officer, Mr. Delfin Gonzalez pointed out that “Our current financial position and our low gearing level provide more than adequate room for us to invest in new growth areas while also optimizing the value of our existing portfolio.” As of the end of the first semester of 2012 Ayala had over P23 billion in cash.

Ayala earlier announced that it is planning to invest around US$1 billion over the next five years in green field and acquisition opportunities in the power sector as well as in transport infrastructure projects under the government’s public-private partnership program. It also recently declared it is issuing P10 billion worth of bonds. This is the second fund-raising initiative that the company is undertaking this year after the bond offer last May 2012 which raised for the company cash proceeds of P10 billion.

As of the first half of this year BPI registered a net income of P9.4 billion, a 52% growth from the same period last year driven by robust growth in net interest income and further boosted by trading gains. The bank is reportedly on track to deliver a sustainable 15% return on equity moving forward.

BPI shares last closed at P77.60 per share, up 40% year-to-date, while Ayala Corporation shares ended at P 425.80 per share, registering a gain of 37% year-to-date. Both have outperformed the performance of the Philippine Stock Market Composite Index which has risen 22% year-to-date.

The above statement pertains to the disclosure made on October 12, 2012, to the Securities and Exchange Commission, Philippine Stock Exchange, and Philippine Dealing and Exchange Corporation, by Ayala CFO Delfin Gonzalez, Jr.

Two of the country’s biggest conglomerates are forming an exclusive strategic partnership to bid for the Mactan-Cebu International Airport (MCIA) Passenger Terminal project. The project is under the government’s public-private partnership (PPP) program and is estimated to cost P10 billion.

Ayala Corporation and Aboitiz Equity Ventures, Inc. (AEV) have signed a Memorandum of Agreement to form a 50-50 joint venture company that will serve as their vehicle to bid for and develop the country’s second largest international gateway.

The Mactan Airport is currently operating at over capacity with passenger volumes exceeding 5 million annually and is projected to grow even faster with the expected increase in tourist arrivals. The redevelopment of the airport will require the construction of a new international passenger terminal.

Ayala Corporation President and Chief Operating Officer, Fernando Zobel de Ayala said, “We are excited about this partnership with the Aboitiz Group. Both groups strongly believe in the potential of the Mactan Airport to be a compelling gateway to the country for international passengers and to the Visayas for the growing domestic travelers. We share the vision of creating an airport that provides passengers an efficient and pleasant travel experience. We look forward to leveraging each other’s strengths in developing and running a modern airport facility that Cebu and our country can be proud of.” Mr. Zobel added, “We cannot think of a better partner for this project than the Aboitiz group who has not only built a long history and heritage in Cebu but also has a successful track record in undertaking significant size projects in multiple industries.”

For his part, AEV President and Chief Executive Officer Erramon Aboitiz said, “We are equally excited about this partnership with Ayala, especially as it is for a project that gives AEV the opportunity to enter into a strategic new segment that is crucial to developing both the country’s transportation infrastructure as well as its tourism potential. It also allows us to harness the Aboitiz Group’s competencies in construction, logistics, utilities, and real estate development & management. In our over a century of doing business, AEV has always been keen to play a key role in nation building and, consequently, we are therefore keen today to support the government’s thrust to develop the nation’s infrastructure gaps.”
“Combined with the Ayala group’s strengths and competencies that have also been honed over more than100 years of doing business, we are very optimistic about the success potential of this project. Moreover, the fact that the project is in Cebu, which is home to the Aboitiz Group, gives it more special meaning to us.”

Ayala, through its property arm, Ayala Land, Inc., has also built a significant presence in the country’s second largest city. It has a total land bank of close to 200 hectares that includes some of the city’s landmarks such as the Cebu Business Park, the Ayala Center Cebu, the Asiatown IT Park and high-end residential developments.

Ayala Corporation is one of the oldest and most respected conglomerates in the Philippines with a diversified business portfolio that includes real estate development, banking and financial services, telecommunications, water distribution infrastructure, automotive dealerships, electronics manufacturing services, business process outsourcing, and power, among others.

Today, together with its joint ventures and foreign alliances, the Aboitiz Group is involved in power generation and distribution, banking, food production, construction, shipbuilding and land development.

The government is expected to announce the bidding for the Mactan airport project before the end of the year. Both parties will enter into a definitive agreement once the bid rules or the terms of reference for the project have been finalized and published by the government and will likewise explore partnerships with experienced global airport operators to complete its consortium.

The above statement pertains to the disclosure made on September 7, 2012, to the Securities and Exchange Commission, Philippine Stock Exchange, and Philippine Dealing and Exchange Corporation, by Ayala corporate secretary Solomon M. Hermosura.

Ayala Corporation’s consolidated net income in the first half of the year reached P6.1 billion, 23% higher than in the same period last year. Core net income, however, was even higher at P6.3 billion or a 35% growth from a year ago. This excludes the impact of the accelerated depreciation of Globe Telecom as a result of its network modernization program and the revaluation gains realized at AG Holdings in the first half of last year.

Higher profits were driven by the strong equity earnings from Ayala’s core businesses. Substantially higher equity earnings from Ayala Land, Bank of the Philippine Islands, and Manila Water cushioned the slight decline in equity earnings from Globe Telecom, which was impacted by the accelerated depreciation from its network modernization program. Equity earnings of core and non-core businesses reached P7.7 billion in the first semester, 24% higher than the P6.2 billion achieved in the same period last year.

Ayala President and Chief Operating Officer Fernando Zobel de Ayala said: “We are encouraged to see the strong trajectory of our core businesses sustained through the first half of this year. The performance reflects the robust domestic demand and the fundamental strength of the economy. We envision our products and services to continue to tap this growing demand as we expand to new market segments and develop a more pervasive presence across the country.”

REAL ESTATE
Ayala Land sustained its high growth with net income up 28% year-on-year to P4.3 billion. All its businesses registered strong results. Revenues grew by 18% to P25 billion with its property development business contributing the bulk of P15.3 billion, up 24% year-on-year. Revenues from its commercial leasing business grew by 21% to P4.2 billion. Ayala Land’s construction and property management business also registered high growth of 47% to P9.4 billion due to brisk residential, office, and mall projects; while revenues from its hotels and resorts business also rose by 15% to P1.3 billion. Revenue growth outpaced the increase in expenses, resulting in margin improvements across the board. Ayala Land’s performance has tracked ahead of targets it originally set in its 5-10-15 plan. It continues to build sources of long-term growth as it replicates its mixed-use community development platform across cities in Mega Manila and as it re-creates its innovative township developments in other provinces in the country.

BANKING
Bank of the Philippine Island’s (BPI) net income reached P9.4 billion in the first half of the year, 52% higher than the P6.2 billion realized in the same period last year. This was driven by the 24% rise in revenues as net interest income rose by 9%, while non-interest income surged by 51%. Net interest income improved as a result of an increase in average asset base and a 14 basis point improvement in net interest spread. Non-interest income was boosted by trading gains realized in the first quarter of the year as the bank sold down its securities inventory at that time. The bank’s loan growth remained strong across all segments. Total net loan portfolio grew by 17%. Both the middle market and SME segments grew by 19% while the top corporate segment increased by 15%. Consumer lending increased by 17%. Despite the double-digit growth in loans, asset quality continued to improve with net 30-day NPL ratio down to 1.4%. With operating expenses growing at a slower rate, BPI’s cost-to-income ratio improved. BPI’s first semester net income performance translates to a return on equity of 21%.

TELECOM
Globe Telecom’s strong momentum was sustained through the first half of the year. Core net income grew by 2% to P5.7 billion. However, considering the increase in operating expenses and the impact of the accelerated depreciation arising from its network modernization program, reported net income declined by 10% to P4.9 billion. Top-line growth remained strong with service revenues reaching an all-time high of P40.8 billion, 6% higher than same period last year. This was driven by record mobile revenues which rose by 6% to P33.3 billion. Postpaid revenues, which now account for a third of revenues, rose by 21% to nearly P1.9 billion, with pre-paid revenues steady. Broadband revenues increased by 13% to P4.1 billion driven by a 22% expansion in subscriber base. The strong growth in broadband and mobile revenues as well as fixed line data revenues cushioned the decline in fixed line voice revenues. Globe’s total mobile subscriber base expanded by 12% during the period to 31.7 million while broadband subs grew by 22% with quarterly gross adds hitting an all-time high. Globe’s network modernization program is on track to hit its year-end target. Modernization of over 40% of its network equipment located in various cell sites all over the country is complete with prioritization for key areas such as metro Davao and Cebu. The next phase includes Metro Manila and other key areas which will result in significant improvements in service quality once completed.

WATER
Manila Water Co., Inc. recorded a net income of P2.6 billion in the first half of the year, a 31% increase year-on-year. The growth was driven by the sustained increase in revenues from both the East Zone and non-East Zone operations. Total revenues rose by P7.2 billion, 24% higher year-on-year as a result of the timely implementation of annual tariff increase and strong billed volume growth in the East Zone. The new businesses also contributed positively, accounting for 5% of revenues and net income. Total billed water volume grew by 36% due to strong sales growth among all operating units with the acquisition of Clark Water and Thu Duc Water in the fourth quarter of 2011. Growth in the East Zone was due to higher consumption of industrial customers and from new connections. Laguna Water, Boracay Water, and Clark Water all registered double-digit growth in revenues and net income. Manila Water recently completed the acquisition of a 47.35% stake in Kenh Dong Water Supply Joint Stock Company in Vietnam. Kenh Dong is expected to start operations within the second half of 2012 with a guaranteed minimum sales volume of 150 million liters per day through a 20-year bulk water supply contract with the Saigon Water Company.

ELECTRONICS
Integrated Micro-Electronics, Inc. recorded an improvement in earnings in the first half of the year with net income up 173% to US$3.1 million. Revenues grew by 24% to US$326 million despite the weakness in developed economies in Europe and the US as well as a slowdown in China. Revenues from China and Singapore operations were 6% lower than year-ago levels due to reduced volumes in a telecommunications infrastructure program and a delay in the production of new models for an industrial electronics program. On the other hand, revenues from Philippine operations grew by 3% year-on-year. IMI recognized revenues this year from its new subsidiaries in Europe and Mexico which combined contributed US$86 million in the first six months of the year. Lower operating expenses resulted in a 22% increase in EBITDA and consequently an improvement in IMI’s bottomline. While the outlook for the global electronics industry remains on positive trend this is tempered by the uncertainty and weakness in the global economic environment. IMI continues to invest in research and development as well as process improvements to take advantage of the uptrend in emerging applications of electronics for the industrial and medical fields as well as renewable energy.

BUSINESS PROCESS OUTSOURCING (BPO)
LiveIt achieved continued growth and margin improvement in the first half of 2012. Share of Revenues reached US$166 million, up 9% year-on-year, while Share of EBITDA reached US$13.1 million, up 26% due primarily to improved profitability at Stream and Affinity Express. As a result, LiveIt reduced its net loss, which is primarily due to acquisition related charges and non-operating items such as those related to taking Stream private in the second quarter. Further improvement is expected in the second half of 2012 due to seasonality and the ramp up of recent client wins.

Ayala parent company ended the period with gross debt of P49 billion and cash of P23 billion. After it issued a 10-billion peso 15-year corporate bond last May, which was the longest tenor issued by a publicly listed corporate, the company raised another P6.45 billion in cash as it placed 15 million common shares it held in treasury. The company had accumulated treasury shares under a buy-back program instituted several years ago at the time the market and its shares were trading substantially below current levels. The bond issue and the share placement were part of the company’s efforts to gear up for planned significant size investments. Ayala is eyeing to invest around US$1 billion over the next five years in the power and transport infrastructure sectors.

The press statement above refers to the disclosure submitted to the SEC, PSE, and PDEx by Ayala chief finance officer Delfin C. Gonzalez, Jr.

Updated August 10, 2012

AYALA LAND, INC.

Ayala Land is coordinating with local government units in assisting flood victims. Employees and the public are encouraged to donate urgently needed items including bottled water, biscuits, and easy-to-open canned/pouched food.

Cash or check donations are also accepted through a dedicated BPI Account of Ayala Land, Inc. (Peso Account 0031-0684-95). For donations from overseas:

Swift Code BOPIPHMMTRY
Bank Bank of the Philippine Islands (Ayala Paseo Branch)
Address G/F Philam Life Building, Paseo de Roxas, Makati City

> Ayala Malls

Ayala Malls allowed its merchant stores to close on August 7, but the malls remained open to provide temporary shelter for those who were stranded.

Donations for flood victims may be handed over to Concierge booths in all Ayala Malls.

BANK OF THE PHILIPPINE ISLANDS

To continue to serve its customers especially at this time of emergency, more than 90% of BPI branches are open. For convenience, BPI’s Bank Anywhere capability allows customers to transact in any branch.

BPI also ensures that ATMs that are not affected by flooding or lack of electricity and telecommunications service remain fully functional and have adequate cash to enable withdrawals. A total of 910 ATMs in the Greater Metro Manila area are available to serve customers. BPI’s electronic channels (ExpressOnline, Express Mobile, and Point-of-Sale Terminals) are also working 24/7 to support transactional needs.

BPI Foundation has mobilized resources to reach out to flood victims. Deposits to the BPI Foundation Assistance Fund (Current Account Number 0011-1530-89) are accepted over the counter and via ATM, mobile, and online banking facilities.

GLOBE TELECOM

> Customer Service

Globe’s service in Metro Manila and outlying areas in Luzon is normal, save for isolated service interruptions in areas submerged in floodwaters or affected by loss of commercial power. Less than 1% of the Globe infrastructure in the Greater Manila Area was affected by flooding, as the company has implemented projects to boost network resiliency and redundancy.

Critical service areas that remain flooded include Navotas, Malabon, Valenzuela, and Zambales. Globe is working on full service restoration in these areas. Field engineers and network teams are on alert and have been working 24/7 to ensure subscribers get uninterrupted voice or data services.

> Relief Operations

Globe is conducting simultaneous relief operations through Globe Bridging Communities (Globe BridgeCom) in Concepcion Integrated School, Concepcion, Marikina; Mother of Divine Providence Parish, Payatas, Quezon City; and Holy Trinity Parish, Fairview, Quezon City.

Its employee-volunteers and partner-organizations are distributing ready-to-eat food, canned goods, rice, assorted clothes and drinking water to an estimated 5,300 families temporarily seeking shelter at these evacuation centers.

> Globe Libreng Tawag

Meanwhile, Globe maintains Libreng Tawag operations at the following sites:

1. Concepcion Integrated School, Marikina
2. Municipal Hall, Navotas
3. Bagong Silangan Elementary School, Quezon City
4. Brgy. Burgos, Dinalupihan, Bataan
5. Brgy. Daungan , Hermosa, Bataan
6. Department of Agrarian Rerform, Quzeon City
7. Brgy. Dolores, San Fernando, Pampanga
8. Nangka Elementary School, Marikina
9. Provincial Capitol, Malolos, Bulacan
10. Mandaluyong Elementary School, Mandaluyong City

Affected residents can make free five-minute local calls to any network, send text messages to all networks or make a two-minute international call at the Globe Libreng Tawag facilities.

A soup kitchen, Libreng Tawag and Charging Stations are also open at Malolos Central School, Bulacan.

For customer assistance, call 730-1000 from any landline or toll-free at 211 from any Globe or TM mobile number. Messages may also be posted at the Globe Telecom Facebook page or tweet @talk2globe.

> Text Mo, Libre Ko

For Globe and TM subscribers who have zero balance, send a message through the “Text Mo Libre Ko” service. Recipients may accept to pay for your text to them. Just send the message to 2354+the 11-digit Globe/TM number (ex. 235409171234567). Use the service to check on friends, relatives or co-workers who are in flood-prone areas or evacuation centers. Each message sent costs P1.00 to the text recipient who gave permission to accept charges for text messages.

> Red Cross

Donate to the Philippine Red Cross via your Globe phone, text REDAMOUNT to 2899. To donate via GCASH, text DONATE AMOUNT 4-digit M-PIN REDCROSS to 2882.

MANILA WATER COMPANY

Manila Water expanded its tankering service at various evacuation centers to cover: Marikina; Pasig, Taguig, Pateros, San Juan, Mandaluyong, and Quezon City; and San Mateo, Rodriguez, Antipolo, Taytay, Cainta, Binangonan, and Jalajala, all in Rizal Province. Static tanks have also been stationed in Marikina and Rodriguez, Rizal.

Manila Water is also providing water in sealed plastic cups in areas that cannot be reached by tankering services due to high flood levels.

For concerns, call the Manila Water hotline at 1627.

AYALA FOUNDATION, INC.

> Ayala Young Leaders Congress

The Ayala Young Leaders Alumni Association (AYLAA) is also conducting a relief drive in close coordination with different agencies on the ground for the purchase and distribution of needed goods. Cash donations may be deposited to BPI Savings Acct No. 0039-2797-62 (Michelle Almenario, AYLC ‘02/AYLAA Treasurer). Kindly confirm deposits by sending an SMS to the AYLC Alumni Relations line: 0917-854 5191.

> Ayala Museum

A Twitter campaign, “The Filipino Spirit is Waterproof,” begun on Wednesday by Ayala Museum to capture Filipino resilience in the face of calamity has received “overwhelming response, inspiring graphic art and memes in the spirit of spreading positivity amidst crisis.” Visit www.twitter.com/ayalamuseum or www.facebook.com/theayalamuseum.

Ayala Corporation, one of the largest business groups in the country, completed today the placement of 15 million common shares held in its treasury. The shares were priced at P430 per share. This raised cash proceeds of P 6.45 billion for Ayala which it intends to use to fund several sizable projects it is eyeing in the infrastructure and power sectors.

Ayala is looking to invest up to US$1 billion over the next five years in the transport infrastructure and power generation sectors as it builds a portfolio of power generation assets and as it sets its sights on toll road, rail, and airport projects under the government’s public private partnership program (PPP).

On top of the Daang Hari–SLEX Connector road, which was the first PPP project rolled out and which Ayala won last December 2011, the company expressed interest to participate in other PPP projects expected to be bidded out soon. Projects of interest to the group include the NAIA Expressway, the Cavite-Laguna (CALA) Expressway, and the LRT Line 1 extension and O&M. Ayala recently formed a strategic partnership with Metro Pacific Investment Corp. to jointly pursue light rail projects in the Metro Manila area. Ayala said it is also keen to participate in the development of airports such as the Mactan Cebu International Airport.

In the power generation sector, Ayala has established a platform of conventional and renewable technologies and has committed around US$100 million of equity on approximately 180 megawatts of gross generating capacity. It began construction of a 135-megawatt CFB thermal plant in Calaca, Batangas in partnership with the Phinma group’s Trans Asia Oil and Development Corp. It is also currently working on a possible second phase of expansion of the plant. Recognizing the country’s need for both base load capacity and alternative energy sources, Ayala is also gradually building its portfolio of renewable energy sources in solar, wind and hydro technologies. Investments in these technologies will be shaped in part by the implementation of the feed-in-tariffs which the government is expected to announce in the coming months. Beyond these initiatives the company continues to actively pursue a robust pipeline of greenfield projects and acquisition opportunities in the power sector.

Ayala President and Chief Operating Officer, Mr. Fernando Zobel de Ayala, said, “The company is in a phase of active investment and is eyeing to build new businesses in power and transport infrastructure. In the same manner Ayala invested in the telecom and water sector in the past, we believe the power and infrastructure sectors are critical for the country’s growth and development. We hope to be able to contribute in some measure to the development of these sectors and at the same time create future sources of earnings and value for the group.”

While the company remains focused on the Philippines, it also continues to explore opportunities in other markets in the region. It recently acquired a 10% stake in Ho Chi Minh Infrastructure Investment Co. (CII), a leading player in the infrastructure sector in Vietnam. CII holds toll road concession agreements such as the 15.7-kilometer expansion of the existing Ha Noi Highway which connects the northeastern part of Ho Chi Minh City to Bien Hoa, an industrial center located in the southern part of Vietnam.

Ayala believes this investment provides strategic access to other infrastructure opportunities which may present opportunities for the Ayala group to establish a presence across several sectors in Vietnam.

Ayala Corporation’s share price has risen by 46% year-to-date with market capitalization of over P260 billion.

The above statement pertains to the disclosure made today to the Securities and Exchange Commission, Philippine Stock Exchange, and Philippine Dealing and Exchange Corporation, by Ayala general counsel Solomon M. Hermosura.

Ayala Land, Inc. (ALI) successfully placed 680 million shares of its common stock at P20 per share for a total of P13.6 billion. The transaction was structured as a top-up placement where Ayala Corporation sold 680 million of its listed ALI shares and simultaneously subscribed to the same number of new ALI common shares.

Following this transaction, Ayala Corporation’s percentage ownership in the voting stock of ALI will be marginally reduced from 73.07% to 71.22% and its ownership in ALI’s common stock will be reduced from 53.06% to 50.43%.

The transaction is not expected to result in any impact on Ayala’s cash flow and net income.

The transaction was launched as a placement of 530 million shares at an indicative price range of P19.80 to P20.20 per share. Due to strong demand, ALI increased the offer size to 680 million shares. This landmark transaction represents the largest overnight placement by a real estate company in Southeast Asia since 2005, as well as the largest ever overnight placement in the Philippines.

ALI will use the proceeds of the share placement primarily to fund its next phase of expansion, enabling it to sustain its high growth trajectory. In addition to its previously announced P37 billion capital expenditure program for 2012, ALI has identified significant land banking opportunities amounting to approximately P36 billion over the next two to three years. Approximately P20 billion of this may be deployed in Makati City and other parts of Metro Manila and the balance in growth centers in Nuvali and other parts of Luzon and in the Visayas and Mindanao.

Furthermore, a portion of the proceeds is also expected to partially fund ALI’s strategic alliance with a group led by Mr. Ignacio R. Ortigas and resulting participation in OCLP Holdings, Inc., the parent company of Ortigas and Company Limited Partnership, for which it allocated an initial investment of P15 billion. This alliance is expected to provide ALI with access to prime properties in Metro Manila amounting to about 55 hectares.