Author: administrator

Ayala’s 175th anniversary corporate communications program has been recognized as the most outstanding project in innovative corporate communications by the Asian Multimedia Publishing Awards (AMPA).

Dubbed as the premier awards program for best multimedia publishing practices in Asia, AMPA incorporates the Asian Book Publishing Awards and Asian Corporate Communications Awards. Managing director and head of corporate resources John Philip Orbeta received the award on behalf of Ayala. Bank of the Philippine Islands’ book Herencia was a finalist in the category Best Book/Best Writer on Asian Media.

With emphasis on messaging and content, Ayala’s 175th anniversary program made use of multi-media platforms to reach internal and external stakeholders. These include the distinctive “Never Stop Believing” print ad campaign; internal print publications (Ayala Now, Ayala at 175 special magazine); an anniversary video featuring chairman emeritus Jaime Zobel de Ayala; a special website and online timeline; animated screensavers; and below-the-line collaterals including banners and exhibits.

The Asian Multimedia Publishing Awards was the highlight of the 3rd Asian Publishing Convention held this year in Manila. A total of 74 projects from 44 companies in nine countries competed for the Awards.

Ayala Corporation’s net income in the first half of the year reached P4 billion, 35% lower than the same period last year. However, excluding gains from asset sales last year, net income rose by 14%. Equity earnings from key business units posted healthy growth with equity earnings from Globe Telecom and Bank of the Philippine Islands up by 7% and 27%, respectively, cushioning the 35% fall in equity earnings from Ayala Land, Inc. (ALI). Companies under its AC Capital division also contributed positively as it reversed last year’s loss following a significant improvement in its electronics manufacturing services unit, Integrated Microelectronics, Inc. (IMI), as well as higher earnings from Manila Water.

Ayala Corporation president and COO, Mr. Fernando Zobel de Ayala said, “We are encouraged by the earnings trend across our key business units despite the marked slowdown in the economy. While conditions will remain challenging, we are much more optimistic given the resilience displayed by each of our businesses during this challenging period. We will continue to see earnings stabilize in the near term and expect growth to accelerate next year.”

While ALI’s core net income in the first half dropped by 16% to P1.87 billion, core earnings in the second quarter rose by 6% to P964 million, indicative of a more positive trend. This was underpinned by a resurgent property market with buyer confidence returning particularly in the high-end residential segment. Residential Development revenues grew by 19% to P3.71 billion in the second quarter. Ayala Land Premiere, the company’s high-end brand, saw a strong recovery while the middle and affordable brands, Alveo and Avida, performed steadily. Demand from the overseas Filipino market recovered with sales up 36% versus the previous quarter. ALI’s revenues from its Shopping Centers rose by 5% to P2.21 billion in the first semester this year driven by the strong performance of Market! Market! as well as the net expansion in gross leasable area from new malls Greenbelt 5 and Glorietta 5. Revenues from Corporate Business likewise increased by 84% to P788 million with increased contribution from the new BPO buildings that became operational in the second half of last year and early this year.

Bank of the Philippine Islands likewise delivered profitable growth with net income in the first semester reaching P5.3 billion, up 38% over the previous year. Revenues rose by 19% with positive contribution from both net interest and non-interest income. Net interest income increased by 18% boosted by the 7% growth in the bank’s average asset base and a 31 basis point improvement in net interest margin. Non-interest income increased by 21% mainly from trading gains. The bank’s loan portfolio grew by 5% on double-digit expansion of consumer loans but with softer demand from the corporate segment. The bank’s asset quality continues to improve as its non-performing loan ratio continued to fall to 2.8%.

Globe Telecom posted a 17% growth in net earnings to P7.2 billion, with core net earnings up 3% over the same period last year. Service revenues increased by 2% on the back of stable wireless revenues and accelerating growth of the wireline and broadband segments which increased by 16% year-on-year. Globe ended the first semester with 25 million wireless subscribers. The company’s broadband business continued to attain new highs, setting a new record in net subscriber additions. The company ended the first half with about 379,000 broadband subscribers, more than double year-ago levels with revenues up 59% year-on-year. The company recently declared its second semi-annual cash dividend of P32 per share in line with the company’s policy of distributing 75% of prior year’s net income. A total of P4.2 billion in dividends will be paid on September 15, 2009, bringing total dividends paid out this year by the telecom company to P8.4 billion.

Business units under AC Capital contributed P77 million in equity earnings in the first half of the year from a loss of P39 million in the same period last year. This reversal was driven by a significant improvement in the performance of Manila Water and IMI.

Manila Water posted a 16% growth in net income to P1.46 billion. Revenues grew by 6% despite pressure on billed volume growth as commercial and industrial customers offset the growth in volume from residential and semi-commercial customers. The impact of higher tariff rate and lower corporate income tax as well as higher interest income boosted earnings during the period. Manila Water recently acquired Laguna AAA Water Corporation, a 25-year concession to provide water to Sta. Rosa, Binan, and Cabuyao. This is expected to expand Manila Water’s coverage and contribute to Manila Water’s growth and expansion moving forward.

IMI recorded a significant improvement in its bottomline in the first half of this year compared to the same period last year in the absence of foreign exchange losses which weighed on earnings in 2008. Revenues in the first half of this year however was lower by 26% in US dollar terms, impacted by the general slowdown in global demand for electronics. While positive sales performance was noted in March and April, lower sales in the first two months of the year continued to impede revenue growth. IMI’s China and Singapore business showed greater resiliency with dollar revenues from this region up 11% year-on-year. IMI’s cash generation remained strong at around US$8 million, ending the period with a consolidated cash balance of US$66 million.

Ayala’s BPO investee companies grew their combined revenues by 8%, from US$82 million in Q109 to US$89 million in Q209, largely due to Integreon. Ayala’s share of the BPO companies’ combined reported loss decreased by 53% from P306 million in the first quarter of 2009 to P143 million in the second quarter, primarily due to improvements in the performance of Affinity Express and Integreon. Ayala’s share of the BPO companies’ combined net loss in the first half of the year was P449 million, which included P156 million in interest expense and P72 million in non-cash amortization of intangibles related to the acquisition of eTelecare, and P44 million in one off transaction costs related to Integreon’s acquisition of Onsite.

Ayala’s BPO investee companies are continuing to build scale, through both organic and inorganic initiatives. To date, Ayala has invested approximately US$200 million in the BPO sector, which it expects to experience stronger growth going forward, as the global economy recovers and outsourcing becomes increasingly important to companies’ cost reduction initiatives.

Ayala’s balance sheet remains strong. The company ended the semester with parent net debt of P9 billion and net debt to equity ratio of 0.09 to 1.

Manila Water Company’s “Tubig Para Sa Barangay” Program received the main award of the Management Association of the Philippines’ 1st Corporate Social Responsibility (CSR) Leadership Challenge.

Manila Water was cited for the successful and strategic integration of social, economic and environmental objectives into its day-to-day business operations. “Tubig Para Sa Barangay” helps uplift the quality of life of low-income communities by providing them with 24-hour supply of potable water at an affordable rate, while addressing business needs such as high rate of water losses due to illegal connections. Moreover, the program has lessened the incidence of water-borne diseases and improved the overall health and sanitation conditions for over 1.5 million people in poor communities.

Globe Telecom, whose “Bridgecom sa Bayan” was a finalist for the main award, also won in the category Best in Enterprise Development for the program, “Empowering Micro-Entrepreneurs in the Countryside,” for using entrepreneurship and microfinance as a enabler for economic self-sufficiency. Globe promotes values-based leadership and entrepreneurial skills among barangay leaders in communities nationwide and helps micro-entrepreneurs put up new home- or community-based businesses.

The MAP CSR Leadership Challenge searched among the group’s member-companies for the most outstanding CSR programs in in the context of good business management. Nearly 80 percent of the participating companies entered programs related to environment, education, and skills training, and more than 40 percent described their owners or chief executives as the prime movers of corporate social responsibility in the organization.

Winners were announced at the joint League of Corporate Foundations-Management Association of the Philippines general membership meeting on July 8 at InterContinental Manila. Other organizations cited by the awards program include Phinma and Planters Development Bank for the main award; Union Bank, Smart, and Shell for education; Citibank for enterprise development; Phoenix Sun, Philamlife, and Phillips-Gawad Kalinga for sustainable community development; and Far Eastern University for Environment.

Hong Kong-based publication Corporate Governance Asia once again recognized Ayala Corporation as among Asia’s best companies for corporate governance.

At the 5th Corporate Governance Asia Recognition Awards held on June 26, 2009 in Hong Kong, Ayala Corporation and subsidiaries Ayala Land, Globe Telecom, and Manila Water were cited as among “The Best of Asia,” a roster of 55 companies from 9 countries noted for their “continuing commitment to the development of corporate governance in the region.” The Ayala group has consistently placed in the rankings since 2007.

Corporate Governance Asia is the region’s most authoritative journal on corporate governance. The quarterly publication provides news and analysis on corporate governance issues, boardroom practices and shareholder activism.

This is the third citation for corporate governance that Ayala and its companies have received this year, following top rankings in a separate poll by FinanceAsia and the Institute of Corporate Directors’ Corporate Governance Scorecard Project.

Ayala ranked second among the Philippines’ most-admired companies in the annual Wall Street Journal Asia 200 survey.

In addition to the outstanding overall performance in this year’s survey, Ayala also earned top rankings in other categories. It was considered best in long-term vision, a category it has consistently led since 1997. It was also viewed as one of the top three companies in terms of quality of products and services, corporate reputation, and innovation, and ranks fifth in financial reputation.

Ayala Land, Bank of the Philippine Islands, and Globe Telecom also figured prominently in the survey, placing third, fifth, and sixth, respectively, in the overall rankings, and in the top five of each category.

The Asia 200 survey, which was conducted from December 2008 to January 2009, was taken in the midst of the global economic downturn. A total of 2,622 executives and professionals in 12 Asia-Pacific countries responded to the poll. This survey of business readers in the region had been conducted since 1993 by the Far Eastern Economic Review until it changed format in 2005.

Ayala Corporation’s consolidated net income reached P2.2 billion in the first quarter, the highest in the past four quarters, excluding capital gains, but 18% lower than the same period last year. Its core business units in telecom and banking registered double-digit expansion in earnings with sustained business volume growth in its key markets. Equity earnings from these units expanded by 7% and 86%, respectively, a reversal of the 35% and 55% decline in the fourth quarter of 2008 and three consecutive quarters of contraction. Equity earnings from its real estate unit, however, declined by 51% as earnings dipped in the absence of one-time gains and slower demand particularly in its residential business.

President and chief operating officer Fernando Zobel de Ayala said, “We are pleased to see some degree of resiliency in domestic demand despite the slowdown in the global economy. This continues to drive the growth of our core business units. However, consumer confidence continues to be tempered relative to pre-crisis levels, but we expect this to eventually turn as macro economic conditions stabilize moving forward.”

Ayala’s telecom unit, Globe, sustained its growth momentum with net income up 17% to P4 billion. Excluding an after-tax gain of P398 million arising from an equipment exchange transaction with an equipment supplier and foreign exchange and mark-to-market gains and losses, core net income was up 5% to P3.7 billion. This quarter’s net income was the highest in the past five quarters. The steady performance of its wireless business and the strong growth of its broadband and wireline data business resulted in net service revenue growth of 3% to P16 billion. Globe’s wireless SIM base continued to expand, reaching 25.7 million subscribers as of end-March. To further gain subscribers, it recently introduced Globe DUO, an innovative service that combines a mobile and wireless landline service into one handset.

Meanwhile, its broadband and wireline data business gained traction. Globe broadband subscribers more than doubled year-on-year with subscribers of the fully mobile broadband service under Tattoo accounting for the bulk of the net additions. Globe has commercially launched its WiMAX (802.16e) service on the 2.5Ghz band, which is one of the first and largest in Southeast Asia. The service is currently available in selected key areas in South Luzon, Visayas, and Mindanao. WiMAX is a leading edge technology solution that provides higher capacity and a dedicated access system that can deliver superior customer experience for Globe’s broadband subscribers. Globe plans to introduce more service innovations that will deliver superior value to its customers and further reinforce its competitive edge in the market.

Its banking unit, Bank of the Philippine Islands (BPI), posted P2.9 billion in net income. This was 86% higher year-on-year, the highest in the past five quarters, and exceeded fourth quarter 2008’s net income by more than 2.6 times. Strong growth in core market segments, better net interest spreads, and trading opportunities amidst a falling interest rate environment drove earnings growth.

Lending activity was strong and broad based with net loans expanding by 12%. Both corporate and consumer loans grew by 13.8% and 18.9%, respectively. Despite the healthy loan expansion, credit quality remained stable with net 30-day non-performing loans ratio at 3.26%, better than the 3.94% a year ago. Total resources as of end-March reached P643 billion, 8% ahead of last year, while deposits expanded by 8.8%. The bank’s remittance inflows increased by over 20%, outpacing industry growth. The bank’s better than expected performance affirms the resilience of the domestic economy and validates the strength of BPI’s banking franchise. BPI maintains the largest market capitalization in the industry at P110.3 billion with a capital adequacy ratio of 14.6% at end-March.

Ayala’s real estate unit, Ayala Land, posted a net income of P907 million. Excluding gains in the first quarter of 2008, net income was 21% lower year-on-year. Consolidated revenues declined by 10% to P7.4 billion as revenues in the first quarter included gains from the said transaction. Overall, most of its core product lines registered healthy revenue growth. Revenues from shopping centers rose by 6%, while corporate business revenues increased by 67%. These were offset by lower residential sales with combined bookings across its three residential brands down by 48% due to slower demand. However, monthly trends show signs that sales are beginning to stabilize with take-up in the first three months significantly better than the prior quarter.

Ayala Land maintains its capital expenditure plan of P17.4 billion this year and is looking to tap more aggressively opportunities where it can expand its geographic footprint in other parts of the country and cater to a broader base of customers.

From its portfolio of companies under AC Capital, Manila Water continued to deliver double-digit earnings growth with net income up 14% to P622 million. Cumulative water sales in the first three months of 2009 was stable and, combined with the partial impact of the inflation rate adjustment, pushed revenues up 6%. The company maintains strong operational efficiencies with non-revenue water down to 20.7% as of March, 2.5 percentage points better than the 23.2% achieved in March 2008.

Manila Water was recently granted a renewal of its concession agreement covering the East Zone for another 15 years. This is expected to benefit all its stakeholders as well as ensure Manila Water’s long-term growth. Beyond this, Manila Water continues to pursue growth opportunities outside of its concession area. Last April, it signed a Memorandum of Agreement with the Philippine Tourism Authority for the management and operation of the wastewater and water distribution facility in Boracay.

Ayala’s export-oriented units, particularly in electronics manufacturing and business process outsourcing, which are more exposed to the global downturn, faced lower volumes.

Integrated Microelectronics, Inc.’s (IMI) sales contracted by 26% as world demand for electronic products remained muted. While various cost management programs partly cushioned the impact and kept operating income positive, lower volumes and pricing pressures resulted in a net loss of P21 million during the period. IMI maintains a solid balance sheet with cash of US$59 million and first-quarter net cash flow from operations at US$5 million. IMI will continue to pursue its cost and risk management programs as well as its marketing initiatives to expand its customer base with high revenue-generating customers.

Ayala’s BPO companies generated US$82 million in revenues, 3% lower than last year, with operating income excluding depreciation and amortization flat year-on-year at US$7 million. However, interest expense and non-cash charges resulted in a combined net loss for Ayala of P307 million.

Ayala continues to believe in the medium to long term growth potential of the BPO sector in the Philippines as companies worldwide intensify cost cutting initiatives. Ayala is expanding its geographic and service capabilities in this space through its investee companies. Recently, eTelecare acquired The Phone House, a South African contact center company, as it eyes opportunities to tap the strategic U.K. market. Integreon also launched in January its first U.K. onshore shared-services center for the legal sector with Osborne Clarke, a top 50 U.K. law firm, as its anchor client. This was followed by the acquisition of Onsite, a leading global provider of electronic evidence solutions for law firms and corporations, based in Arlington, Virginia.

Ayala ended the quarter with close to P30 billion in cash and net debt of P8.7 billion. Zobel added, “Ayala’s strong financial and cash position give the group the flexibility to pursue growth initiatives at both the holding company level and at the level of the operating units. These initiatives will continue to build on the strong market position we have achieved in our key markets and allow us to achieve a stronger growth trajectory as the economic cycle turns.”

Ayala Corporation and its listed subsidiaries led FinanceAsia’s ninth annual poll of the Philippines’ top companies, the Hong Kong-based publication recently announced.

Ayala retained its leadership as the best managed company and best in corporate governance in the Philippines, while four of the top eight companies in both categories are Ayala subsidiaries, namely, Globe Telecom, Manila Water, Bank of the Philippine Islands (BPI), and Ayala Land, Inc. (ALI).

Chairman and chief executive officer Jaime Augusto Zobel de Ayala was named best CEO, a new category introduced in this year’s polls. Globe Telecom chief finance officer Delfin Gonzalez, Jr. and Ayala treasurer Ramon Opulencia were once again cited as best CFOs in the country.

Ayala also earned high marks in investor relations together with Globe, ALI and Manila Water, and topped another new category, best corporate social responsibility, with Manila Water and ALI. Globe and BPI were considered second and third most committed to a strong dividend policy, respectively, and Manila Water was named best mid-capitalization company.

Other companies that made it to FinanceAsia’s list of best managed companies in the Philippines were PLDT, Banco de Oro, Security Bank, Megaworld, and ICTSI. The FinanceAsia poll was conducted among 238 investors and analysts across the region.

In its Annual Stockholders’ Meeting held today, Ayala Corporation announced its group companies combined are prepared to spend P49 billion in capital expenditure projects in 2009 despite the more challenging economic environment. Chairman and CEO Jaime Augusto Zobel de Ayala said, “we believe there are opportunities that can be realized that will strengthen the foundation for our sustained growth.” He added, “This will position the group appropriately for the next upturn in the economic cycle.” About 35% of this year’s planned capex is allocated to its real estate development projects, with 33% for its telecommunications expansion, and 23% for its water distribution services.

In 2008, Ayala and its business units raised a combined P23 billion in cash at the height of the tightness in credit markets to ensure more than sufficient liquidity to pursue its growth plans in 2009. Of this, the parent company raised P6 billion from its preferred share issue last November, which combined with its other fund raising efforts, raised close to P10 billion in fresh funds for debt prepayment and new investments. By year-end the holding company had cash of P25 billion after US$60 million in debt prepayments. Net debt was at its lowest in five years with net debt-to-equity ratio at 0.09 to 1 by the end of 2008.

Ayala has re-deployed some of its cash into the high growth business process outsourcing (BPO) sector with cumulative investments of around US$200 million to date. Jaime Augusto said, “We continue to believe in the long-term prospects of offshoring and outsourcing and the natural competitive advantages of the Philippines to be a significant player in this robust global market.”

Beyond the BPO space, Ayala continues to explore investment opportunities in other industries. It recently signed a Memorandum of Agreement with its operating units, Bank of the Philippine Islands (BPI) and Globe Telecom, to create the country’s first mobile micro-finance bank. Mr. Zobel said, “This venture builds on BPI’s extensive delivery and infrastructure network and Globe’s tested G-Cash micro payment platform.” He added, “We continue to explore ways to leverage on our group’s strengths and create business models that align our business goals with a broader social and national development agenda.” Ayala takes the view that there are compelling growth propositions in doing business at the base of the wealth pyramid that can be value-enhancing for Ayala and a much wider base of stakeholders.

In 2009, Ayala celebrates its 175th anniversary. The seventh-generation chairman of the business conglomerate said, “As an organization, we have always set our sights on the future and have not sought to take comfort from the past. It is our ability to adjust to changing environments, in a progressive way, that marks our longevity as an institution. However, anniversaries are also important moments for self reflection. 175 years, by any independent standard, is a long period of time in any company’s history. There are few corporate examples globally of institutions with a similar capacity for resiliency over this swath of time. We should take heed of the values that brought us to this point- values of trust and prudence on one hand but imagination and vigor on the other, coupled with a long term commitment to aligning ourselves to a progressive national development agenda. As we reflect on our changing roles; as an institution that now builds environmentally sound communities, rolls out advanced communication networks, creates stable financial securities, implements clean water systems and invests in both technology driven services and manufacturing entities aligned to global markets – I take some pride in being part of an Ayala that remains true to the dreams of those who have built this company before us. I hope we can continue to count on the support of all our stakeholders as we chart our paths, with the same set of core values, well into the future.”

Ayala Corporation reported an unaudited consolidated net income of P8.1 billion for 2008. This was 50% lower than in 2007 as equity earnings from its operating units dropped to P7.8 billion and as capital gains from share sales declined by 63%.

Listed units Ayala Land, Bank of the Philippine Islands (BPI), Globe Telecom, and Manila Water all posted positive results. However, the uncertainties spawned by the global financial crisis as well as some non-recurring items weighed on earnings.

Ayala realized capital gains of P2.7 billion in 2008. In 2007 it booked a record P7.3 billion in gains as the company took advantage of higher asset prices that year to realize values from some of its long-held investments. These value realization efforts, combined with several successful fund raising initiatives in 2008, allowed Ayala to raise its cash to a level of P25 billion by year-end. This would position the company appropriately for potential acquisition opportunities amidst deflating asset prices. Ayala’s net debt has consistently declined over the few past years putting the net debt to equity ratio by year-end at 0.09 to 1.

Ayala Corporation president and chief operating officer, Fernando Zobel de Ayala, commented, “While the operating environment is and will continue to be challenging, these distressed conditions also present opportunities. We continue to explore these and have ensured sufficient liquidity across the group to pursue any compelling opportunity on top of our committed growth targets in the short to medium term.”

Ayala’s real estate unit, Ayala Land, Inc., posted record earnings of P4.8 billion in 2008, 10% higher than the prior year as demand for its middle and affordable residential brands, Alveo and Avida, remained healthy. Higher completion rate for its construction projects also boosted consolidated revenues, which increased by 31% to P33.7 billion. Revenues from its shopping centers and corporate business segments grew by 3% and 10%, respectively, with the strong performance of Market!Market!, Alabang Town Center and TriNoma, and incremental contribution from newly opened malls. Its headquarter and BPO offices continued to achieve high lease and occupancy rates as well as increased gross leasable area with the completion of 6 BPO buildings at UP Technohub, which were substantially leased by year-end.

Its banking unit, BPI, achieved good business volume growth. Loans expanded by an unprecedented 17%, driven by strong demand from corporate and retail consumers. This was the second straight year BPI posted double-digit loan growth. Despite the growth in loans, asset quality continued to improve with net 30-day non-performing loans ratio down to 2.9%. BPI’s deposit base expanded by 5% to hit P540 billion by year-end, with total customer funds and assets held in trust up by 8.9%. The bank’s remittance business also saw strong growth, up 35%, with volume reaching US$4.4 billion, significantly outpacing the industry’s 15%. BPI’s net income however fell by 36% to P6.4 billion due to a P2.8 billion decline in securities trading income and a P1.3 billion decline in non-recurring investment income of the insurance subsidiaries, which included a gain from the sale of the Ayala Life Building as well as sale of shares the prior year. BPI’s capital adequacy ratio of 14.1% remains well above the 10% regulatory minimum. Last December, the bank successfully issued P5 billion in 10-year subordinated debt eligible as Lower Tier 2 capital.

Globe Telecom’s revenues remained steady amidst slowing domestic consumption. Consolidated revenues reached P62.9 billion from P63.2 billion the prior year. Wireless revenues were flat amidst a 22% growth in its subscriber base while revenues from its wireline business increased by 7%, driven by its corporate data and broadband businesses. Globe’s broadband subscriber base grew by 84% in 2008 with the highest net adds noted in the fourth quarter. Higher operating expenses capped EBITDA but EBITDA margin remained high at 59% as costs arising from broadband investments lowered margins. Wireless EBITDA margin continues to be robust at 65% while wireline EBITDA margins have been under pressure given the dynamics of the start-up broadband business. This put Globe’s net income 15% lower in 2008 to P11.3 billion. Globe’s free cash flow remains strong. It recently declared its first semi-annual cash dividend of P32 per share, which puts Globe among the highest in dividend yields in the Philippine Stock Exchange.

Ayala’s equity earnings from companies under its AC Capital division declined, weighed by non-recurring losses from its electronics unit, Integrated Microelectronics, Inc. (IMI), AG Holdings and BPO companies under LiveIt. This offset the positive earnings contribution of its water and automotive dealership businesses.

IMI’s revenues expanded by 5% in 2008 due to strong double-digit growth of its operations in China and Singapore which offset slower volumes from Philippine and US operations. Increased business with a leading Chinese telecommunications company and new customer programs cushioned the impact of the general slowdown in demand. IMI’s operating income remained positive at US$18 million, however, a non-recurring loss from currency hedging contracts as well as a one-time provision for manpower expenses and inventory obsolescence expenses resulted in a US$16 million loss in 2008. Excluding these non-recurring items, IMI’s net income would have reached US$32 million.

Manila Water reported a net income of P2.8 billion on the back of higher water sales volume complemented by further improvements in the company’s operating efficiency. This was made possible through the company’s intensive capex program. In 2008 alone, the company spent a total of P4.2 billion as it accelerated the implementation of expansion projects and invested in new systems and processes. Billed volume went up by 4% to 387 million cubic meters as Manila Water expanded its customer base by 46,765 new household connections. In addition, the company managed to further reduce system losses by 6 percentage points to 19.6%, from a high of 63% in 1997. This is the first time that Manila Water has brought its level of water losses to below 20%, which is significantly better than most of the company’s regional counterparts. The company also began construction on a number of sewerage treatment plants in 2008, with the aim of bringing sewerage coverage to 30% by 2012 from the present level of 16% for the East Zone.

On a combined basis, the investee companies of LiveIt, Ayala’s BPO investment arm, recorded revenue growth in US dollar terms of 16%, and achieved revenues of P15.4 billion and EBITDA of P1.4 billion in 2008, LiveIt’s second full year of operations. The BPO units further diversified their client base in 2008 with eTelecare winning 11 new clients and 31 new programs, Integreon adding 14 new customers across the corporate, legal and financial services sectors, and Affinity Express now serving over 140 publications of seven of the top 25 newspaper companies in the US. However, they posted a combined net loss, of which LiveIt’s share was P874 million, due primarily to factors such as one-time non-recurring expenses related to the eTelecare tender offer, non-cash accounting charges, such as stock compensation expenses and the amortization of intangibles related to the investments in investee companies, and unfavorable foreign exchange forward contracts that eTelecare entered into. LiveIt, together with Providence Equity Partners, completed the tender offer for eTelecare’s common shares and American Depositary Shares last December resulting in the acquisition of 98.7% of eTelecare’s shares. Overall, Ayala remains positive about the growth trajectory of the BPO sector. Ayala expects that, as in past recessions, outsourcing will continue to grow in the short term but at a slower pace, and then will experience accelerating growth in the medium to long term, as companies intensify their cost-cutting.

Zobel acknowledged, “The global crisis will no doubt further temper domestic consumption and will inevitably impact demand for some of the products and services of our operating units, in varying degrees. However, we remain optimistic that we can manage through the challenges given the solid business models of each of our operating units, their strong fundamentals and balance sheets, and dominant market positions.”

The above statement refers to the disclosure submitted to the PSE and SEC today, February 16, 2009, by Ayala chief finance officer Rufino Luis T. Manotok.

The board of directors of Ayala Corporation approved today the declaration of the quarterly cash dividends this year of 8.88% per annum on our Preferred Class “A” shares, with the following record and payment dates:

First Quarter
Record Date: Feb 11, 2009
Payment Date: Feb 25, 2009

Second Quarter
Record Date: April 28, 2009
Payment Date: May 25, 2009

Third Quarter
Record Date: July 29, 2009
Payment Date: Aug 25, 2009

Fourth Quarter
Record Date: Oct 29, 2009
Payment Date: Nov 25, 2009

The dividends will be paid from its unappropriated retained earnings as of December 31, 2008.

The above information is based on the disclosure made to the Securities and Exchange Commission, the Philippine Stock Exchange, and the Philippine Dealing and Exchange Corporation, by Ayala general counsel and compliance officer Solomon M. Hermosura.