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Ayala Corporation is the Philippines’ best managed company, according to the annual poll of FinanceAsia, a leading financial publication covering the region’s capital and banking markets.

Ayala Land, Inc. (ALI), Bank of the Philippine Islands, Globe Telecom, and Manila Water ranked 3rd, 5th, 6th, and 8th place among Philippines companies, respectively.

Ayala Corporation was also deemed best in corporate governance and corporate social responsibility, and ranked second for investor relations. Ayala subsidiaries also ranked high in these categories. BPI, ALI and Globe were third, fifty, and seventh best in governance. Globe and BPI were in fourth and eighth place for investor relations. MWC, Globe, and BPI were in second, sixth, and seventh place for corporate social responsibility.

Globe, BPI, and Ayala were ranked second, third, and sixth best among companies most committed to a strong dividend policy.

ALI president Antonino Aquino is among the Best CEOs in the Philippines.

Published on May 16, the results of FinanceAsia’s 12th annual poll of Asia’s top companies were gathered from votes of 265 investors and analysts across the region.

In addition, Hong Kong-based publication CorporateGovernanceAsia once again recognized corporate governance in the Ayala group as among the Best of Asia. Ayala Corporation, ALI, Manila Water, and ALI subsidiary Cebu Property Ventures and Development Corporation were among the companies recognized in the magazine’s 8th Annual Recognition Awards for continuing to lead the way in initiating best practices which provide an open, ethical and continuing dialogue with stakeholders in the spirit of fairness and Asian values.

Ayala group has once again topped the list of publicly listed companies with the highest standards in good governance.

Ayala Corporation, Ayala Land, Inc. and Manila Water Company were recognized as Platinum Plus awardees during yesterday’s Annual Dinner staged by the Institute of Corporate Directors (ICD).

The Platinum Plus Award is given to companies who have been part of the Gold circle for four consecutive years.

Bank of the Philippine Islands also achieved Gold standing this year joining the category of companies with 95% and above ratings.

Silver citations were also given to Globe Telecom, Integrated Micro-Electronics, Inc., and ALI subsidiary Cebu Holdings Inc. with scores ranging from 90 to 94%.

Evaluation was based on the companies’ practices pertaining to shareholder rights, equitable treatment of shareholders, role of stakeholders, disclosure and transparency, and board responsibilities.

“Our experience in the Ayala group, being an enterprise that has been operating for the past 178 years, affirms that good governance is imperative in creating a sustainable enterprise over the long term,” said Jaime Augusto Zobel de Ayala, Chairman and CEO.

This year’s corporate governance scorecard evaluated a total 196 publicly-listed firms yielding an average score of 76%.

Ayala Corporation’s net income reached P3.5 billion in the first quarter, 42% higher compared to the same period last year. This was driven by a 35% increase in equity earnings as its real estate, banking, and water businesses registered strong double-digit growth in earnings in the first three months of the year. Significant improvements in its electronics and business process outsourcing businesses also helped lift earnings during the period.

Real estate unit, Ayala Land, Inc., maintained solid growth posting a 31% increase in net income to P2.1 billion. This was underpinned by strong revenues and net income margin improvement. Revenues grew by 17% to P12.4 billion with double-digit increases across all business segments. Residential and property development revenues grew by 18% on the back of strong take-up of Ayala Land Premier, Alveo and Avida residential products, which combined, nearly doubled versus the first quarter of last year. Revenues from its commercial leasing and hotels and resorts businesses also grew by 21% and 16%, respectively, as it continued to expand gross leasable area. Ayala Land remains on track with its 37-billion peso capital expenditure program this year for project completion and land acquisitions.

Its banking unit, Bank of the Philippine Islands (BPI), registered a net income of P5.8 billion, significantly ahead of the previous year’s P2.8 billion. This was fuelled by its core banking business as well as securities trading gains. Loans grew by 20% as lending remained brisk across all customer segments, while the bank’s 30-day non-performing loan ratio improved further to 2.0%. BPI’s deposits grew by 7%, putting total assets under management to P716 billion, up 15% year-on-year. Net interest income grew by 8% aided by a 14 basis point improvement in net interest margin. The bank’s earnings were further enhanced by trading gains amounting to P3.7 billion as the bank sold some of its securities in inventory. BPI is set to pay a special cash dividend of P0.50 per share in addition to its regular cash dividend of P0.90 per share for the first half of the year.

Telecom unit, Globe Telecom (Globe), continued to build on the momentum it achieved over the past six quarters. Consolidated revenues in the first quarter reached a new all-time high of P20.2 billion, 6% higher year-on-year. Its mobile business performed strongly driven by robust demand for its postpaid and prepaid services. Globe’s broadband business also continued to grow with revenues up 13% year-on-year. Its new mobile and broadband services attracted subscribers which resulted in higher net adds during the period, pushing mobile subscriber base to 31 million, up 14% versus last year, and broadband subscribers to 1.5 million, 26% higher versus the same period last year. Operating expenses and subsidy were higher driven by the growth in postpaid customers and expenses related to the Company’s network modernization program. This, coupled with higher financing and other non-operating charges, resulted in a 10% decline in reported net income. Core net income, which excludes foreign exchange and mark-to-market charges and one-off items, was 7% lower at P2.7 billion.

Its water unit, Manila Water Co., Inc. posted a net income of P1.3 billion, 64% higher than the same period last year. This was a result of higher revenues due to strong sales in the East Zone and the impact of the tariff increase implemented at the start of this year. Revenues grew by 28% with new businesses in Laguna, Boracay and Clark contributing nearly 5% of total. Operating expenses, however, increased by 23% due to higher power and overhead costs as the company continued to expand its water and wastewater network coverage and pursued new business initiatives. Manila Water was recently awarded the bulk water supply project in Cebu and was also recently awarded the right to purchase a 49% stake in Kenh Dong Water Supply which owns and operates major water infrastructure in Ho Chi Minh City in Vietnam.

In the meantime, Ayala’s international businesses reported improvements in performance during the quarter. Its electronics unit, Integrated Microelectronics, Inc. (IMI) posted a 128% growth in net income year-on-year as revenues grew by 24%. This was attributed to the company’s business expansion in Europe and Mexico and reduced operating expenses.

The investee companies of its BPO holding company, LiveIt, likewise improved results with combined revenues of US$255 million, of which LiveIt’s share was US$83 million, up 12% versus the prior year. Greater scale and cost efficiencies resulted in its share of EBITDA growing by 18% to US$7 million, and in the further reduction of its net loss, which was primarily due to acquisition related charges.

Ayala Corporation president and chief operating officer Fernando Zobel de Ayala noted, “We are encouraged by the sustained growth trajectory of our core businesses and the improving performance of our international businesses. Domestic consumption remains robust which continues to benefit our core businesses. We continue to pursue our capital investment and expansion plans, taking advantage of this favourable macro-economic environment and ensure we sustain our growth momentum moving forward.”

Ayala is looking to participate in selected infrastructure projects under the government’s public private partnership (PPP) program. The company recently partnered with Metro Pacific Investments Corp. to jointly pursue light rail transit projects in Metro Manila after winning the first road project under the PPP program.

It was also recently awarded by Ho Chi Minh City Infrastructure Investment Joint Stock Company (“CII”), the right to purchase a 10% stake in CII. CII is a leading player in the infrastructure sector in Vietnam with a portfolio of strategic infrastructure assets, including water treatment plants and toll roads serving Ho Chi Minh City and surrounding areas.

Ayala recently raised P10 billion through a corporate bond issue to gear up for potential capital requirements.

Ayala ended the quarter with cash at the parent level of nearly P14 billion and net debt to equity of 0.23 to 1. The company’s share price has risen by 47% year-to-date, closing yesterday at P458.80 per share.

The above statement pertains to the disclosure made today, May 11, 2012, to the Securities and Exchange Commission, Philippine Stock Exchange, and Philippine Dealing and Exchange Corporation, by Ayala chief finance officer Delfin C. Gonzalez, Jr.

Ayala Corporation commences today its public offer of P10-billion 15-year corporate bonds due 2027. This would be the first corporate bond in the domestic capital market with a 15-year tenor. Bonds bear an interest rate of 6.875 per cent per annum.

Ayala is raising funds for its capital requirements to enable the company to realize opportunities for expansion both through organic growth of its existing business lines as well as value-accretive acquisitions. This includes opportunities presented by various domestic infrastructure projects. The company recently won the bid for the Daang Hari connector road under the government’s public private partnership program. It also recently forged an agreement with the Metro Pacific group to jointly pursue and develop light rail transit projects in Metro Manila. Part of the proceeds of the bond offer will also be used to prepay the company’s debt.

Ayala Corporation treasurer Ramon Opulencia noted, “We always ensure that we maintain a highly flexible funding position at the holding company level that will allow us to invest in sizable projects without impeding other value-enhancing initiatives we are currently undertaking. The low-interest rate environment and the robust liquidity in the system provide an ideal environment for us to be able to stretch our tenors and match the anticipated long gestation period of the investments that Ayala envisions.”

Ayala has been a consistent and innovative issuer in the domestic capital market over the past few years. It has pioneered investment products in the local market that provided the broader investing public, particularly retail investors, with alternative investment choices. In May 2011 Ayala raised P10 billion through a bond offering that was the first to provide investors with multiple put options. One of its landmark capital market deals, among others, was a local currency denominated hybrid shares launched in 2006 which had a follow-on offer in 2008.

Ayala Corporation’s balance sheet remains strong. It ended 2011 with a very healthy cash position and a low gearing level with net debt to equity ratio of 0.24 to 1.

This year’s P10-billion bond offer will be offered to the public through the mandated underwriters, namely, BPI Capital Corp., BDO Capital & Investment Corp., First Metro Investment Corp., Hongkong and Shanghai Banking Corp., ING Bank Manila, RCBC Capital Corp., SB Capital Investment Corp., and Standard Chartered Bank.

The bonds will be listed in the Philippine Dealing and Exchange System (PDEX) on May 11, 2012.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The consolidated unaudited reported net income of Ayala Corporation reached P9.4 billion in 2011. This was 16% lower than reported net income in 2010, which included an extraordinary net gain of P3.6 billion versus only P611 million this year. Excluding extraordinary gains this year and last year, net income grew by 16% year-on-year. The strong growth in recurring earnings was driven by core businesses in real estate, banking, and water as well as improvements in its international real estate business and BPO businesses.

Most of the company’s core business units posted record earnings in 2011. Ayala Land, Inc. achieved a record net income of P7.1 billion, 31% higher than prior year on the back of strong double-digit revenue growth across all business segments and margin improvements. Banking unit, Bank of the Philippine Islands, posted an all-time high net income of P12.8B in 2011, a 13% increase over 2010 earnings. This was underpinned by strong net interest income growth and higher net interest margins. The bank’s net loans grew by 20% as top-tier corporates, middle market and SMEs and consumer loans expanded at double-digit rate. Telecom unit Globe outperformed the industry as core net income grew by 11% to P10 billion. Globe’s revenues reached an all-time high of P67.8B up 9% from last year and ahead of industry’s 2% growth. This was driven by the market’s positive reception of its product and technology innovations and service enhancements. Finally, water unit, Manila Water, Co., Inc. also posted an all-time high net income of P4.3 billion, 7% higher than prior year as billed volume continued to improve and as it connected more households into the system. Its new businesses in Laguna, Boracay, Clark, and Vietnam have likewise contributed positively to earnings.

Earnings of Ayala’s international real estate business turned positive in 2011 from gains realized from the exchange in ownership in Arch Capital and Arch Capital Asian Partners with The Rohatyn Group in the first quarter of last year. 2010 also included provisions for certain assets in its US operations.

The four investee companies under BPO holding company, LiveIt Investments, achieved combined revenues of US$1 billion of which LiveIt’s share was US$318 million, up 16% versus the prior year. Greater scale and cost efficiencies resulted in its share of EBITDA rising by 63% to US$25 million, and in the significant reduction of its net loss, which was primarily due to acquisition related charges.
The weak global economic environment, however, impacted the earnings of its electronics unit, Integrated Microelectronics, Inc. (IMI). While IMI’s revenues grew by 40%, its net income declined by 30% as a result of margin pressures from rising direct labor and materials cost.

“We are pleased with the solid performance of our core businesses in real estate, banking, telecom, and water”, said Ayala President and COO Fernando Zobel de Ayala. “Their growth momentum has been very positive and they remain dominant in their respective industries despite intense market competition across these sectors. The robust consumption trend and the healthy macro-economic fundamentals have created a very favorable operating environment. We expect the growth trajectory of our businesses to continue as we aggressively expand our products and services to address the needs of a still largely untapped segment of our population. We also expect our international businesses to improve their profitability moving forward as they benefit from scale following their acquisition initiatives the past years and as they benefit from cost optimization efforts.”

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

Last year, parent company Ayala established a platform for its new businesses in the power and transport infrastructure space. In 2011, the holding company committed capital of close to P7B for the development of projects in solar, wind, hydro, and thermal power generation, as well as for the construction of a four-lane 4-kilometer road that will link Daang Hari road in Cavite to the South Luzon Expressway under the first public-private partnership (PPP) project of the Aquino government. Ayala is eyeing other projects in the PPP list expected to be rolled-out this year, particularly rail, road, and airport-related projects.

The company has taken an aggressive stance in terms of expansion in the Philippines across multiple sectors, signifying its increased level of commitment to the country’s continued development. It has strong capacity to make these investments. Ayala ended 2011 with a very strong balance sheet with parent company cash of P18 billion and a very low gearing ratio with parent net debt-to-equity of 0.24 to 1. Return on equity was at 9%.

Ayala’s share price has risen year-to-date by 34% to P417 per share as of the close of trade March 8, 2012, outperforming the Philippine Stock Exchange composite index which rose by 13% over the same period.

This press statement refers to the disclosure submitted today to the Securities and Exchange Commission, Philippine Stock Exchange, and Philippine Dealing and Exchange Corporation by Ayala chief finance officer, Delfin Gonzalez, Jr.

On February 7 to 10, all roads lead to Alfonso, Cavite, for delegates of the 14th National Ayala Young Leaders Congress (AYLC).

Eighty-one of the country’s most promising youth leaders will attend the four-day congress to further enhance their leadership skills and build bonds with like-minded peers from all over the country.
With the theme, “Winning Hearts and Minds: Changing Paradigms,” the congress will have Department of Education Secretary Bro. Armin Luistro as keynote speaker.

This year’s AYLC aims to challenge participants to bring meaningful change to their schools and communities through one of the most essential steps in leadership: by winning the hearts and minds of the communities they serve.

“We want our participants to realize that the work of leadership and bringing about change necessarily involves winning and transforming the hearts and minds of the communities they lead,” says AYLC program director John Philip Orbeta.

Delegates of the congress come from a broad range of disciplines and were chosen not only for their academic achievement but also for their involvement in their respective schools or communities they serve. A total of 809 students from colleges and universities from across the Philippines sent applications, from which 81 delegates were selected after rigorous paper screening and panel interviews with Ayala group executives. They are from 56 higher education institutions including the Philippine Military Academy, the Philippine National Police Academy, and seminaries such as Mother of Good Counsel Seminary, Rogationist Seminary College – Manila, and the St. Augustine Seminary.

AYLC delegates will participate in four days of lectures, panel discussions, workshops and outdoor activities designed to hone their leadership potential and inspire them to lead lives of integrity and to work for the good of their community and country.

Aside from Sec. Luistro, notable figures from government, business, and the socio-civic and arts sectors will share their personal experiences in servant leadership. These include Philippine Air Force Commanding General Lt. Gen. Oscar Rabena, Ligao City Mayor Linda Gonzales, musician Noel Cabangon, and GMA7 journalist Kara David.
Also returning to the congress are AYLC alumni who will help inspire this year’s group of young leaders. Invited AYLC alumni as guest panel speakers are Roselle Ambubuyog (AYLC 2000), an access technology consultant for several foreign firms developing resources for the blind; Jay Neil Ancheta (AYLC 2001), regional volunteering development adviser of the Voluntary Service Overseas–Bahaginan Foundation, Inc.; and Christine dela Cruz (AYLC 2004), trade service officer/commercial attaché of the Department of Trade and Industry.

The Ayala Young Leaders Congress is the flagship program for youth development created in 1999 by the Ayala group of companies as a concrete expression of its commitment to national development. Now on its 14th year, AYLC continues to fuel the dream of nurturing a corps of servant leaders who will use their leadership to help uplift the lives of Filipinos.

Ayala Corporation announced that at the opening of financial bids for the Daang Hari/SLEX Road Project held today, December 15, 2011, it submitted the highest complying bid. Ayala Corporation submitted a bid of P902 million for the construction, operation and maintenance of the 4-kilometer road that will link Daang Hari road in Cavite to the South Luzon Expressway (SLEX) for the 30-year concession period besting San Miguel Corporation’s bid. Ayala expects the Department of Public Works and Highways to formally award the concession on December 22, 2011.

Daang Hari is a major arterial road connecting rapidly growing towns of Imus, Dasmariñas and Bacoor Cavite to Metro Manila via SLEX. The Daang Hari Project will be a new road that exits SLEX near the Susana Heights Interchange and passes through government properties in Muntinlupa, ending at Daang Hari near Verdana Homes in Imus, Cavite. This road provides strategic access to Cavite, much needed relief to traffic in the congested Alabang-Zapote Road and Commerce Avenue.

Ayala Corporation President and Chief Operating Officer, Mr. Fernando Zobel de Ayala said, “We are delighted to have submitted a competitive proposal for the first project under the government’s public-private partnership program. This is a good initial foray in the transport infrastructure space and we believe this successful experience working within a public-private partnership framework would be helpful in pursuing future projects under the PPP program. This road project provides significant opportunities for synergies within the Ayala group, especially our real estate group, Ayala Land, Inc., as it cuts travel time to our residential and commercial projects in this rapidly growing part of the metropolis.”

Ayala in partnership with Getinsa, a Spanish engineering company with deep expertise in infrastructure project globally, expects to begin the detailed design stage, which will be completed in four months. The DPWH expects to complete all right-of-way requirements within six months of signing of the Concession Agreement.

Ayala Corporation reported first nine months’ net income of PhP 7.3 billion, 7% higher than earnings in the same period last year. The growth was primarily driven by its property business and the sustained momentum of its banking and telecom businesses. Altogether, equity earnings from these core units increased by 9%. This was, however, tempered by lower equity earnings from the electronics, BPO, and Auto businesses and put total equity earnings during the period to P9.2 billion, up 8% year-on-year.

Ayala ended the period with a healthy cash level of PhP 26 billion and net debt of PhP 23 billion, keeping net debt to equity at 22%. The company continues to pursue initiatives in the power and transport infrastructure sectors. Recently, its joint venture company under South Luzon Thermal Energy Corp. (SLTEC) announced that it was able to obtain a PhP 9 billion project finance loan for the construction and operation of its 135-MW thermal plant in Calaca, Batangas. Ayala was also pre-qualified by the Department of Public Works and Highways (DPWH) to bid for the Daang Hari – SLEX Link Road Project. The project will involve a 26-year operations and maintenance concession period. The submission of bids and award of the project is scheduled for the end of 2011.

Ayala Corporation president and COO Fernando Zobel de Ayala said, “The favorable domestic economic environment and the continued robust local consumption have underpinned the growth of our core businesses. We continue to take advantage of this momentum as we constantly develop and redefine our products and services in order to meet the diverse needs of our broadening customer base.”

REAL ESTATE
Ayala Land’s net income surged by 33% to a nine-month high of PhP 5.2 billion on the back of strong revenue growth across key business lines. Revenues from residential property development grew by 27% as a result of steady project completion and strong bookings. Ayala Land’s aggressive expansion saw residential unit launches reaching 10,045 at the end of the first nine months, with an estimated value of PhP 34 billion and nearly equivalent to full year launches in 2010. Its revenues from shopping centers grew steadily by 6% while office building revenues rose by 20% as occupied gross leasable area (GLA) and leased-out rate in its BPO portfolio improved significantly. Higher revenues combined with further improvement in operating efficiency and effective management of costs translated to an improvement in overall margins. Operating income improved by around 30% compared to the same period last year.

BANKING
Bank of the Philippine Islands’ nine-month net income reached PhP 9.6 billion, up by 6% year-on-year. Total revenues were 7% higher than the same period last year, driven by a 9% increase in net interest income. Net interest income growth was boosted by a PhP 67 billion increase in average asset base, while net interest margins remained stable. Loan growth was healthy at 22% year-on-year. Growth was broad-based across all market segments with top-tier corporate, middle market, SMEs, and consumer loans posting double-digit expansions. Despite the strong loan growth, asset quality remains better than industry as 30-day nonperforming loan ratio improved further to 2.3%. In the meantime, non-interest income was just slightly ahead of the previous year as securities trading gain fell short by P809 million from last year as expected. This was, however, more than compensated for by higher fees and commissions, income from insurance operations, and other operating income. The bank’s total intermediated funds increased by 20% to P1.3 trillion, coming mainly from a 44% growth in assets under management. Return on equity reached 15.5%.

TELECOM
Globe continued its strong momentum and reported nine-month net income of nearly P8 billion, 7% higher year-on-year. The company delivered record service revenues in the third quarter, which put nine-month consolidated service revenues at nearly P50 billion, 9% higher than same period last year. This was driven by the continued rise in domestic voice, SMS, mobile data services, and the growth in internet browsing activity. Globe’s mobile service subscribers grew by as much as 15% to 29.1 million while broadband service subscribers surged by 36% to 1.4 million. The strong take-up for the Company’s customizable postpaid plans, innovative all-network offers, and unlimited voice and SMS promos were key contributors to the company’s strong performance. EBITDA margins were maintained at 54% as strong revenue growth cushioned the impact of higher operating expenses. Network-related expenses also rose to support an expanded mobile and broadband network. Excluding foreign exchange and mark-to-market gains and losses, Globe’s core net income increased by 15% from last year’s P7.1 billion to P8.2 billion this period.

WATER
Ayala’s water business generated total operating revenues of PhP 8.9 billion, a 7% increase on the back of the approved adjustments in tariff for the year in the East Zone, and a 19% growth in revenues from its new businesses. The company’s core net income increased by 13% to PhP3.3 billion, while net income rose by 5% to PhP 3.1 billion, which includes the mark-to-market loss on its PhP 4 billion bond. Billed volume in the East Zone grew marginally during the period due to the residual effect of the prolonged rainy weather and ongoing water conservation measures. However, this was partly mitigated by additional sales from new service connections in the East Zone. The number of service connections in platform and expansion areas in the concession zone increased by 4% with over 30,000 new connections. In the meantime, billed volume in its new concessions in Laguna and Boracay, posted 18% and 20% growth, respectively, and also added new connections. These will be catalysts for increased volume sales looking forward alongside its continued expansion in new areas across the country. Manila Water recently announced it signed a Sale and Purchase Agreement to acquire 100% of Clark Water Corporation which is the concessionaire for the Clark Freeport Economic Zone.

AUTO
Ayala’s automotive dealerships were impacted by supply problems in the aftermath of the calamities in Japan last March. As a result, revenues declined by 20% to PhP 7.2 billion primarily due to lower vehicle sales. Net income slowed to PhP 76 million, 69% below earnings posted during the same period last year. The Ayala dealerships though continued to lead both Isuzu and Honda networks given its 32% and 47% market share, respectively. Recent flooding in Thailand where Honda units are assembled will create supply disruptions in many Asian markets.

ELECTRONICS
Integrated Microelectronics, Inc.’s (IMI) generated year-to-date sales of US$ 420 million, 43% better than last year, inclusive of the impact of its recent acquisitions. Its China business grew by 16%, mainly driven by increased turnkey business from major customers. IMI’s revenues from its Philippine operations increased by 9% versus the same period last year. Sales from IMI Europe reached US$ 25.7 million covering months of August and September. Year-to-date net income was US$ 1.6 million which includes US$2.3 million in forex gain and other income. Net income level was 67% lower compared to last year as a result of higher direct labor and materials cost.

BUSINESS PROCESS OUTSOURCING
The investee companies of LiveIt achieved healthy revenue and EBITDA growth. Combined revenues were US$ 736 million for year to date September, 12% higher than last year due to the growth of client volumes across all investees. Greater scale and cost efficiencies resulted in LiveIt’s share of EBITDA rising by 42% to US$ 16 million, and operating net income reaching US$ 0.4 million during the period. LiveIt however reported a net loss of US$ 19 million after taking into account financing and non-operating expenses.