Author: kestrel

MANILA — Ayala Corporation successfully listed the second tranche of the company’s P30 billion debt securities program on the Philippine Dealing & Exchange Corporation on Thursday.

This issuance successfully raised P15 billion to refinance a P10 billion bond with an original maturity in May 2027. The remainder of the proceeds will be used to support Ayala’s investment program for 2022.

Amidst market volatility, the bond offering was met with high investor demand, raking total bids of P121.2 billion or 12.12 times oversubscription over the base issuance of P10 billion. This is the largest book a non-bank and non-government deal has seen in recent years.

“We are honored to have received positive investor response to this issuance that supports our liability management in a rising interest rate environment.  It also validates the market’s confidence in Ayala’s credit quality, while solidifying our balance sheet under volatile markets,” said Fernando Zobel de Ayala, President & CEO of Ayala Corporation.

“This is the largest Peso-denominated issuance by volume that we have seen from Ayala Corp,” said Antonino Nakpil, President & CEO of Philippine Dealing & Exchange Corp. “The size of the issuance has not fazed investors, whose demand for AC instruments triggered the oversubscription from the initial issue size of P10 billion.”

The Ayala group remains committed to helping ensure the vibrancy of the Philippine capital markets. Ayala Corporation, Ayala Land, and BPI have raised an aggregate of over P75 billion over the past two years. Ayala group bonds currently account for around 15% of the total tradeable value of corporate debt instruments in the country.

“We are thankful for the market’s continued trust in the Ayala group as the funds that we have raised will be helpful in enhancing our core value drivers, expanding our emerging businesses, and further unlocking value through our portfolio investments,” Zobel added.

“We are optimistic that Ayala Corporation will continue to be at the forefront as a reliable partner of government towards nation-building,” said Securities and Exchange Commissioner Kelvin Lester Lee.  

“With a diverse portfolio spanning from banking, real estate, telecommunication, renewable energy, water infrastructure, and electronics technology, Ayala is certainly in every aspect of our lives. It is truly one of the country’s oldest and most revered organizations that have stood the tests of time,” Lee added.  

For 2022, Ayala group allocated up to P285 billion in combined capital expenditure and investments to execute on the growth initiatives across its businesses. The group commits to support the continued expansion of its core value drivers Ayala Land, BPI, Globe, and ACEN. It will also scale up emerging businesses AC Health and AC Logistics to create new sources of growth and value.  

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For more information:
YLA ALCANTARA
Head, Brand and Reputation Management
Ayala Corporation
e-mail – publicaffairs@ayala.com

MANILA, June 17, 2021 – Over 2,000 employees of the Ayala Group of Companies who belong to  the A4 (economic frontliners) category have begun receiving jabs of the COVID-19 vaccine on  June 14 at the UP-Ayala Land TechnoHub in partnership with the Quezon City LGU. This is Ayala’s  first vaccination site out of 24 sites around the country.  

In the coming days, Ayala’s medical arm, AC Health, in partnership with various LGUs will  continue to administer jabs to Ayala’s A4 employees in vaccination sites in Makati Stock Exchange  in Makati City, BGC Parkade 3 in Taguig City, and Ayala Malls Manila Bay in Paranaque.    

AC Health President and CEO Paolo Borromeo said, “As our public health experts have always  advised, our goal as a country should be to vaccinate as many people as we can, as quickly as we  can. We greatly encourage our employees to be vaccinated for their protection, as well as for the  protection of their families, colleagues, and communities. In doing so, we will help drive our  country’s economic recovery safely and responsibly. For our part, our goal at AC Health is to  administer 1Mn doses in 2021 for the Ayala Group and our external partners.”  

Earlier this year, Ayala launched the Ayala Vaccine and Immunization Program (AVIP), following  its order of 1 million vaccine doses, expected to arrive in tranches beginning this month.    

Ayala created the AVIP for thousands of its employees (direct and outsourced),  retirees, registered employee dependents, household staff and partners to encourage and  facilitate their vaccination. AVIP also allows registered participants to have one-year access to  unlimited medical consultation as well as health monitoring in AC Health’s network of clinics and  hospitals nationwide.  

“Since the onset of the pandemic, Ayala has been committed to protecting its employees. Apart  from ensuring financial security through wage continuance, we also provided COVID-19 testing  for our customer-facing employees. We also expanded our capacity in our Qualimed COVID referral hospitals in Laguna and Bulacan to ensure that we could accommodate employees with  severe symptoms. Through AVIP, we hope to give our employees and their loved ones additional  protection from COVID-19 at the workplace and in their homes,” said Ayala Chief Human  Resource Officer John Philip Orbeta.  

More than a year into the pandemic, the Ayala group remains steadfast in bolstering the national  and local governments’ efforts to defeat COVID-19. Ayala capitalizes on its diverse business units  to address both health and economic challenges. From ensuring the financial security and safety  of its employees at the onset of the pandemic to building and capacitating key healthcare  infrastructure nationwide, Ayala continues to respond to the needs of its various stakeholders 

and the broader population. As of May 15, 2021, Ayala has allocated close to P16 billion in various  pandemic-related initiatives.  

For more information:  

YLA ALCANTARA 
Head, Brand & Reputation Management 
Ayala Corporation 
e-mail – alcantara.ypg@ayala.com 

Ayala Corporation bagged the Silver Award as Asia’s Best Integrated Report and was a finalist in five other  categories at the 6^th Asia Sustainability Reporting Awards (ASRA), the most prestigious international  awards for corporate reporting.  

Due to the pandemic, the event was hosted virtually in Singapore by CSR Works and was attended by a  multitude of representatives from Asian companies who practice Sustainability Reporting. Broadcasted  live, the ceremony was attended by more than 250 business leaders and sustainability practitioners from  20 Asian countries. Special guests and dignitaries from the academe, embassies, trade associations, and  advocacy organizations were also present.  

Guests of Honour H.R. Ms. Kara Owen, British High Commissioner to Singapore, and H.E. Mr. Niclas  Kvarnström, the Swedish Ambassador in Singapore gave their welcome remarks to formally open the  ceremony. Going beyond just announcing the winners, the program included segments where ASRA  judges were featured in a string of rapid-fire questions on sustainability reporting.  

The independent panel of judges followed a rigorous multi-tier evaluation process that involves three  rounds of assessment. This ensures that the winners in every category are the best according to the  criteria for judging and comprehensive due diligence that considers the company’s reputation among their  stakeholders. For this awarding cycle, the judges reviewed a total of 494 entries from 17 countries for 19  categories. Only 102 companies from 14 countries made it to the finals. The fierce competition produced  39 winners who were awarded with gold, silver, and bronze medals and a Report of the Year award.  

Rajesh Chhabara, managing director of CSRWorks International and the founder of ASRA, notably  commented the increasing quality of sustainability reports across the region and that each year, choosing  the winners are becoming more and more challenging. This gives a positive outlook on sustainability  reporting in the region and signifies the growth and maturity of the practitioners in the field.  

President and CEO of Ayala Corporation, Fernando Zobel de Ayala, says “We are grateful, honored, and  humbled to receive the Silver award for Asia’s Best Integrated Report. This award serves as an affirmation  of our continued sustainability efforts and it reminds us to commit to and persevere in the long road  ahead. More than an award, this is a challenge to us to never cease in improving our reporting process as  we continue to uphold the highest standards of integrity and accountability.” 

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For more information, contact:  
Yla Alcantara  
Head, Brand and Reputation Management  
Ayala Corporation  
Email: alcantara.ypg@ayala.com

28 May 2021, MANILA – Four years since it last tapped the local debt market, Ayala Corporation  returns big via a debt securities program that is more than 10 times oversubscribed.  

During the virtual listing ceremony led by the Philippine Dealing & Exchange Corp., Ayala  Corporation President and CEO Fernando Zobel de Ayala said the successful issuance of the first  tranche of the company’s P30 billion debt securities program, which raised P10 billion in  proceeds, will support Ayala’s strategic priorities: strengthening and recalibrating its diverse  portfolio and repositioning the company for a post-pandemic economic recovery.

“The Ayala group has always been and continues to be an active participant of the capital  markets,” said Zobel. “During this [health] crisis, Ayala Corp., Ayala Land, BPI, Globe, Manila  Water, and AC Energy raised over P190 billion pesos in combined proceeds from the domestic  and international capital markets to allow us to take advantage of opportunities and further  solidify our balance sheet during these challenging times.”  

The oversubscription of the offering allowed Ayala Corporation to price at the lowest end of the  marketing range, carrying a coupon of 3.0260% and 3.7874% for the 3-year and 5-year tenor,  respectively. Moreover, this offering is the largest 5-year allocation among dual tranche offers  during the pandemic, a reflection of the market’s confidence in Ayala’s long-term stability and  credit strength.  

“We are delighted to see that investor interest remained high, with demand from both retail and  institutional investors reaching over P60 Billion,” Zobel added.  

Zobel, meanwhile, lauded the Securities and Exchange Commission and the PDS Group for  launching the country’s first Electronic Securities Issue Portal called e-SIP, which would eliminate  voluminous paper-based submissions and expand a company’s reach by selling securities online.  Ayala Corporation and Ayala Land were the first companies to utilize the e-SIP system.  

In his remarks, Securities & Exchange Commission Chairperson Emilio Aquino thanked Ayala  Corporation for playing an important role in realizing the “capital market’s potential to sustain  our economy’s expansion and bring growth to every Filipino.”  

“As issuers, you create legitimate investments opportunities. And through the capital market,  you make them accessible and thereby allow fellow Filipinos to share with your business success.  By pursuing your expansion projects responsibly and sustainably, more of our fellow Filipinos can  be employed and will be able to provide for and secure a better future for their families,” Aquino  added. 

In addition, Antonio Nakpil, President & CEO of Philippine Dealing & Exchange Corporation,  commended Ayala Corporation and Ayala Land for being the pioneer users of the e-SIP portal  and for their continued support to local capital markets.  

“It is fitting that the Ayala Group, led by Ayala Corp—the longest-standing supporters, constructive contributors, and most active group of issuer participants of the domestic capital market—featured prominently to bookend this month, a milestone in the digitalization timeline for the corporate bond primary market,” Nakpil said.

At Ayala Corporation’s annual stockholders meeting last month, Zobel said the Ayala Group will continue to support the expansion of its core value drivers—Ayala Land, BPI, Globe, and AC Energy. It will also support the growth of emerging businesses, Entrego and AC Health. For 2021, the Ayala Group is allocating a combined capex of P196 billion.

For more information:
YLA ALCANTARA
Head, Brand and Reputation Management
e-mail – alcantara.ypg@ayala.com

The Ayala group is coming strong in responding to the call for more effective climate related financial reporting with its business units signing as official supporters of the Task  Force on Climate-related Financial Disclosures (TCFD). Recognizing that climate change  is a universal challenge that could irreversibly devastate communities and organizations,  the Ayala group took deliberate steps in affirming its resolve, supported by initiatives to  protect and renew the environment. Now joining the more than 1,800 TCFD supporters  from 78 countries are Ayala Land Inc, Bank of the Philippine Islands, Globe Telecom Inc.,  AC Energy, Manila Water Co., and Integrated Micro-electronics Inc. – setting another  milestone for the group since its pioneering effort to report on TCFD disclosures in its  2019 Integrated Report.  

TCFD is a set of globally recognized recommendations by the Financial Stability Board  that encourages organizations to align their strategies and financial reporting to the risks  and opportunities associated with climate change. Adoption of these recommendations  helps companies build a more resilient financial system, based on more transparent  climate-related disclosures, risks, and opportunities.  

With this strengthened commitment, the newly signed-up business units of Ayala will  undergo a gap analysis against the four pillars of TCFD: Governance, Strategy, Risk  Management, and Metrics & Targets. Each organization will disclose according to the 11  recommendations and set up strategies that will ensure adherence to the four pillars.  Beyond helping investors, lenders, and insurers have a better view of the company’s  longevity and resilience, this will help Ayala navigate the financial landscape as it  transitions to a low-carbon economy.  

This bold step is in line with Ayala Corporation’s Sustainability agenda, one that is backed  by commitments of CEOs across the group:  

Ernest L. Cu, Globe President and CEO, emphasizes the responsibility they have in  ensuring they positively contribute to the environment as they serve their customers, “As  a sustainability leader, we are mindful of our impact on Filipinos and our society. That is  why we leverage our strong culture of innovation and use of technology to mitigate risks  to our business operations and protect the environment. Climate change is a global  concern that requires an ‘all of nation’ approach to manage its impact. In supporting  the Task Force on Climate-related Financial Disclosures (TCFD), Globe joins a robust  multi-sector international alliance to address climate-related risks through science-based  research, financial information, and disclosures. We invite our partner vendors, customers and the rest of our stakeholders to collectively join us in taking action on  climate change for a sustainable future.” 

BPI President and CEO, Jose Teodoro “TG” K. Limcaoco, also expresses the bank’s  aim to further integrate sustainability in the business and encourages their stakeholders,  saying, “This ongoing pandemic magnified the importance of having a strategy to create  long-term value and longevity. BPI has contributed significantly to nation-building in the  past 170 years, and we are committed to continue our role in shaping a better Philippines  by integrating sustainability into our strategies and practices. We support the Task Force  on Climate-related Financial Disclosures (TCFD) as this will help us better understand  climate-related risks, and more importantly, put us in a better position to address and  mitigate potential risks and seize opportunities. We encourage all our stakeholders,  customers, and partners to commit to responsible business practices for a more  sustainable and brighter future.”  

Manila Water President and CEO, Jose Rene Gregory D. Almendras, also sees TCFD  as an avenue to further engage with stakeholders and says, “Manila Water adopted a  climate change policy in 2007, even before a law was passed, because we knew we had  to commit to climate change adaptation efforts to ensure resilience towards situations of  ‘too much water’ and ‘too little water’ brought about by extremes in the water cycle. The  disclosure recommendations from TCFD will hopefully gain us more support from our  stakeholders in taking collective action to address this global issue.”  

Meanwhile, IMI President and CEO Arthur R. Tan says, “IMI has always been in the  forefront of pioneering ESG values in the manufacturing sector for the Philippines. As a  part of the global supply chain for the world’s top brands and products, we have been  complying and exceeding these requirements over the past decades. Our decision to  support the TCFD initiatives is a natural path for us to take and support.”  

In the field of real estate, Ayala Land President and CEO Bernard Vincent O. Dy¸  stresses the benefit of being a TCFD supporter and says, “As a real estate company  operating in the Philippines, Ayala Land has long recognized the importance of  responding to climate change. We welcome the Task Force for Climate Related Financial  Disclosures (TCFD) recommendations as these provide a clear framework on disclosing  material climate-related information. By adopting TCFD recommendations, the company  will have a more thorough understanding of climate risks and opportunities. We can then  continue to align our future investment strategies so that we can effectively transition to  a lower-carbon economy.” 

Speaking more about efforts toward a low-carbon economy, John Eric Francia,  President and CEO of AC Energy, reaffirms their commitment by saying, “AC Energy is  transitioning to a low carbon portfolio. The company will be divesting all its coal assets by  2030 and scaling up renewable investments, which is expected to exceed 5GW by 2025. In line with this commitment to sustainable investing, the company is adopting the TCFD  framework along with the Ayala group.” 

Ayala Corporation’s President and CEO, Fernando Zobel de Ayala, takes this joint effort  of the business units to support TCFD as a vital step in the group’s sustainability journey,  “This decisive effort of the Ayala group to collectively support TCFD is in line with our  aspiration to be a regional leader in the field. This is a common ground for our largely  diversified group, one that speaks of our continued commitment to transparency and  accountability. In light of the pandemic, we believe that our alignment with TCFD will help  make us a more future-ready Ayala.”  

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For more information: 
Yla Alcantara  
Head, Brand & Reputation Management  
Ayala Corporation  
e-mail – alcantara.ypg@ayala.com

AYALA CORPORATION 
1Q 2021 EARNINGS RELEASE 
May 14, 2021

Ayala’s net profit sustains sequential growth in the first quarter

 1Q21 vs 4Q20 Highlights

• Ayala’s core net income, which excludes the significant increase in BPI’s loan loss provisions and one off items such as the retroactive effect of the CREATE law and the additional remeasurement loss  taken for Manila Water, grew five percent to ₱7.2 billion in the first quarter of 2021 from the fourth  quarter of 2020. This is also at par with the core net income generated in the first quarter of 2019,  pre-pandemic.  
• This quarter-on-quarter improvement in core net income was primarily driven by Globe from stronger contribution from its home broadband segment and AC Energy from its commercial operations. 
• This cushioned the weaker performance of Ayala Land, AC Industrials, and AC Ventures. ▪ On the other hand, Ayala’s reported net income, which includes the abovementioned items, declined  seven percent to ₱5.4 billion. 
•  On the other hand, Ayala’s reported net income, which includes the abovementioned items, declined  seven percent to ₱5.4 billion.

“The challenges and prospects brought about by the pandemic is an opportune time to recalibrate Ayala’s  portfolio strategy. In the next three years, we aim to sharpen the components of our portfolio to optimize  returns and further strengthen our balance sheet. We will place greater emphasis on portfolio strategy  with a sharper focus on optimizing returns from existing businesses and a disciplined process on capital  deployment. In parallel, we will actively explore opportunities for value realization to fund future  investments,” Ayala President and CEO Fernando Zobel de Ayala said. 

1Q21 vs 1Q20 Highlights 

• Ayala’s core net income declined nine percent to ₱7.2 billion in the first quarter from the same period  last year.
• Meanwhile, Ayala’s reported net income dropped 19 percent to ₱5.4 billion:  
  •  Ayala Land recorded a 36 percent net income decline to ₱2.8 billion as the pandemic  continued to affect its business operations.
  • BPI posted a net income decline of 22 percent to ₱5 billion as a result of a one-time tax  adjustments in connection with previously booked loan provisions following the retroactive  implementation of the CREATE law. 
• On the other hand, Globe and AC Energy posted double-digit net income growth during the period:
  • Globe’s net income increased 11 percent to ₱7.3 billion from the combined effect of higher gross  service revenues, decline in non-operating charges, and significant upside from the retroactive implementation of the CREATE law. 
  • AC Energy posted a net income growth of 24 percent to ₱2.4 billion, driven by higher earnings  from both international and Philippine businesses. 

Real Estate 

•  Ayala Land’s consolidated revenues and net income decreased 13 percent to ₱24.6 billion and 36  percent to ₱2.8 billion, respectively in the first quarter of 2021 as it continued to weather the impact  of the ongoing COVID-19 pandemic.  
•  Property development revenues saw a modest decline of six percent to ₱16.2 billion, cushioned by higher bookings and construction progress.
  • Residential revenues were flat at ₱13.6 billion. 
  • Office for sale revenues surged 85 percent to ₱1.8 billion.
  • Commercial and industrial lots decelerated 67 percent to ₱818 million. 
• Residential sales reservations reached ₱28.5 billion, 15 percent higher than the previous year’s level,  as local demand remained strong despite the quarantine.  
  • First quarter sales reservations were up 35 percent from the previous quarter’s ₱21.1 billion.
• Commercial leasing revenues registered a 41 percent decline to ₱5.1 billion as operations of malls,  hotels, and resorts remained restricted. 
  • Shopping center leasing revenues went down 58 percent to ₱2 billion
  • Office leasing income improved two percent to ₱2.5 billion, driven by sustained BPO and  headquarter operations. 
  • Hotels and resorts rental revenues decreased 60 percent to ₱640 million.
• Capital expenditures reached ₱15.3 billion in the opening quarter of the year, 17 percent of full-year ₱88 billion budget.
• AREIT Inc., the country’s first Real Estate Investment Trust, recently secured the approval of its  shareholders for the property-for-share swap transaction with Ayala Land. The asset infusion,  composed mainly of ALI’s office leasing properties located within its prime estates, will expand AREIT’s leasing portfolio to 549,000 square meters and increase its deposited property value to ₱52 billion  upon securing regulatory approvals.

Banking

• BPI posted a net income of ₱5 billion in the first quarter of 2021, 22 percent lower in the same period  last year due to the net effect of one-time tax adjustments from the effectivity of the CREATE law. Net  income before taxes on the other hand grew five percent to ₱8.9 billion in the same period. 
•  Total revenues decreased two percent to ₱24.3 billion due to lower net interest income partially offset  by non-interest income growth.
  •  Net interest income dropped seven percent to ₱16.9 billion on the back of a 31-basis point  contraction in net interest margin, which stood at 3.31 percent. 
  •  Non-interest income increased 12 percent to ₱7.4 billion due to robust fee income that came  from higher fees from bancassurance, asset management, transaction banking, and  investment banking businesses.
• Total loans declined by five percent to ₱1.4 trillion because of softer demand across most loan  products, except for mortgage and microfinance which registered 11 percent growth each.  
• Total deposits were flat at ₱1.7 trillion with CASA growth of 12 percent being offset by the 34 percent  decrease in time deposits. 
  • CASA ratio stood at 82.6 percent. 
  • Loan-to-deposit ratio ended at 81.6 percent. 
• The bank recognized ₱3.6 billion in provisions, 13 percent lower in the same period last year. NPL  ratio stood at 2.76 percent and NPL coverage ratio reached 123.5 percent.
  •  Operating expenses declined two percent to ₱11.8 billion, while cost-to-income ratio improved to 48.6 percent from 49 percent in the same period last year.
• BPI launched several new products and services since the start of the year to better address the  evolving needs of its customers: 
  •  BPI customers can now open a dollar savings account through the BPI mobile app as an  addition to their existing peso account.
  •  BPI now uses mobile keys for select mobile transactions to enhance security and efficiency. ▪ The bank’s digital platform now allows users to transfer funds to other banks using QR codes,  mobile numbers, and email addresses.
  • Through a digital order taking facility, clients can now avail of select loans and credit card  services purely through BPI’s digital platform. 
  • On the corporate side, BPI launched a fully digital auto-debit platform that shortens billers’  collection period for enrolled clients from 20 banking days to just one banking day.

Telco

• Globe’s net income increased 11 percent to ₱7.3 billion in the first quarter of 2021 as the decline in  non-operating charges fully offset the rise in depreciation expenses. Additionally, the improvement  in net income was a result of lower taxes from the retroactive impact of CREATE law.
  •  Excluding the impact of CREATE law, normalized net income decreased 27 percent to ₱5  billion.
• Total service revenues grew three percent to ₱37.8 billion driven by data revenues led by mobile data  and home broadband. Total data revenues accounted for 79 percent of total service revenues, a  growth of 400 basis points from the same period last year.
• Growth in data was present in all segments, most evident in the upward momentum of Globe’s mobile data and home broadband categories.
  • Mobile data revenues increased four percent to ₱19.2 billion. 
  •  Mobile data traffic climbed 60 percent to 836 petabytes.
  •  Home broadband revenues soared 27 percent to a record ₱7.4 billion.
  • Home broadband subscriber base grew 81 percent to over 4 million customers. ▪ Corporate data increased by ₱13 million from ₱3.3 billion in the same period last year. 
• EBITDA dropped 11 percent to ₱18.3 billion on the back of higher expenses across expense line items except for interconnection fees and repairs and maintenance. 
  •  Operating expenses including subsidy grew 19 percent to ₱19.5 billion.
  • EBITDA margin consequently contracted to 48 percent from 56 percent last year.
• Capital expenditures surged 79 percent to ₱19.1 billion, representing 51 percent of gross service  revenues and 105 percent of EBITDA. Moreover, 91 percent of the investment went primarily to data related requirements. 
• As a result of continuous modernization of its network to make 5G as well as fiber technology available  to more customers nationwide, Globe improved its data infrastructure versus the same period last  year:
  • New cell towers ramped up to 318, an improvement of 152 percent 
  • Builds for sites for wireless 4G LTE and 5G reached 4,210 sites, a growth of 106 percent 
  • Installed over 287,000 high-speed lines, an increase of 212 percent

Power

• The AC Energy group registered a net income growth of 24 percent to ₱2.4 billion in the first quarter  of 2021, driven by higher earnings from both international and Philippine businesses. Contribution from the group’s international assets increased 61 percent to ₱952 million driven by fresh contribution  from the Vietnam wind farm, and higher interest income on development loans. Net income  contribution from its listed subsidiary, AC Energy Corporation or ACEN grew 24 percent to ₱628 million due to better results from its commercial operations, higher contribution from renewables,  and improved thermal availability. 
• The AC Energy group is in the process of transforming its listed subsidiary ACEN to become the  group’s main energy platform. ACEN’s recapitalization consists of fresh capital raising of ₱27.5 billion  from the recently concluded ₱5.4 billion Stock Rights Offering last January, the ₱11.9 billion private  placement to GIC affiliate Arran Investment that was completed last March, and proceeds worth ₱10.3  billion from the follow-on offering which is expected to be completed with the listing of 1.58 billion  primary shares on May 14.
• The transformation also includes the infusion of the AC Energy group’s international platform into  ACEN, in a deal valued at ₱85.9 billion. The shareholders ratified the deal during its Annual  Stockholders meeting last April 19. The transaction is currently undergoing regulatory approval  process, with target completion by the end of 2021. 
• Upon the completion of its transformation, ACEN will have approximately 2,500MW of attributable  capacity, of which around 1,900MW or 78 percent is from renewables sources. AC Energy’s vision is  to reach 5GW of renewables capacity by 2025, and it aspires to be the largest listed renewables  platform in Southeast Asia. 

Water

• Manila Water’s net income declined eight percent to ₱1.3 billion in the opening quarter of 2021 from  the combined effect of lower billed volume across the group and lower supervision fees, coupled with  recognized net foreign exchange gains that were partially offset by lower equity share in net income  of associates. Excluding one-offs, net income declined 32 percent to ₱1.3 billion.
• Revenues decreased 12 percent to ₱4.9 billion due to lower billed volume and lower supervision fees,  which continue to be impacted by the COVID-19 health crisis.
• EBITDA declined five percent to ₱3.2 billion despite a decrease in cost of service and operating  expenses. EBITDA margin improved 500 basis points to 67 percent.
• In March 2021, Manila Water executed a Revised Concession Agreement with government for the  operation of the waterworks and sewerage services in the East Zone. The revised agreement confirms  the continuation of the concession until July 31, 2037. Largely adopting the New Clark City Joint  Venture Agreement framework, the agreement has several key features such as the setting of a fixed,  nominal rate of return, the removal of corporate income taxes from tariff collection, discontinuation  of the foreign currency differential adjustment, and the setting of tariff caps for rate adjustment. The  Revised Concession Agreement will be covered by an Undertaking Letter and service obligations will  be adjusted in line with the new standards defined under the agreement. To help alleviate customers’ plight amid the challenges brought by COVID-19, the Revised Concession Agreement includes a tariff  freeze until December 31, 2022.

Industrial Technologies 

• AC Industrials narrowed its net loss to ₱200 million in the first quarter of the year on the back of  improved contributions across its global manufacturing businesses and local automotive operations. 
• From a net loss in same period last year, IMI recorded a net income of US$2.2 million in the first  quarter amid tight supply levels in the electronics component market.  
  •  Revenues increased 28 percent to US$328 million from improved demand compared to the  same period last year, which was heavily impacted by the first stages of the global health crisis.
  •  Similarly, top line from its wholly owned businesses grew 22 percent to US$255 million with  the continued recovery of mobility and industrial end-markets.
  • IMI’s non-wholly owned subsidiaries posted a revenue growth of 55 percent to US$73 million  as it transitions towards high growth automotive and industrials customers.
• AC Motors significantly reduced its net loss to ₱39 million as demand in the Philippine automotive  market continues to improve. Sales across its automobile portfolio, which includes Honda, Isuzu,  Volkswagen, Kia, and Maxus exhibited quarter-on-quarter growth during the period.

Balance Sheet Highlights 

• Parent level cash stood at ₱20.6 billion.
• Net debt stood at ₱104.5 billion. 
• Parent net debt-to-equity ratio stood at 80 percent.
• Consolidated net debt-to-equity stood at 62 percent.
• Loan-to-value ratio, the ratio of its parent net debt (excluding the fixed-for-life perpetuals which have  no maturity) to the total value of its assets, was at 10.7 percent.
• Parent-only CAPEX stood at ₱2.6 billion, bulk of which went to the newer businesses of Ayala. 
• On May 11, 2021, Ayala Corporation priced the first tranche of its ₱30 billion Debt Securities Program  and is currently applying for a Certificate of Permit to Offer Securities for Sale of the first tranche  under the said program. The first tranche has an aggregate principal amount of up to ₱10 billion, with  a base offer of up to ₱6 billion and an oversubscription option of up to an additional ₱4 billion. The  first tranche consists of 3.0260% Series A Bonds due 2024 and 3.7874% Series B Bonds due 2026. The  indicative offer period will run from May 17 to 21, 2021 and the Bonds are intended to be issued and  listed at the Philippine Dealing & Exchange Corporation on May 28, 2021, subject to market  conditions and receipt of regulatory approvals.

7 May 2021 – The Ayala group of companies officially turned over to Marinduque the province’s  first and only molecular lab which is expected to drastically cut down the current 7 to 14 day  waiting period for Covid testing done through Manila-based laboratories.  

Housed within the Marinduque Provincial Hospital in the municipality of Boac, the laboratory was  designed and constructed under the supervision of AC Health and Ayala Foundation, with the  assistance of Makati Development Corporation, the construction arm of Ayala Land Inc.  

Since the pandemic started, Marinduque depended on laboratories in Metro Manila, particularly  the Research Institute for Tropical Medicine, to confirm COVID-19 cases. Because of the relative  isolation of the island province and its distance from testing laboratories, cases often took over  a week or more to confirm, which posed a challenge to local efforts to contain the spread of the  virus. Once operational, the new molecular laboratory will significantly improve and speed up  the testing capacity of the province.  

The new facility was received by Marinduque Governor Presbitero Velasco Jr. in a virtual turnover  event. Representing the Ayala group were Paolo Borromeo, President and CEO of AC Health; Ruel  Maranan, President of Ayala Foundation; and Solomon Hermosura, Chief Legal Officer of Ayala  Corporation.  

The Marinduque molecular laboratory is part of the Ayala group’s continuing initiatives that sup port the public sector’s COVID-19 efforts, particularly in improving testing capacity. In the past  year Ayala constructed laboratories and quarantine facilities, provided testing equipment, and  donated testing kits, among others.  

“This molecular laboratory is a very vital tool for Marinduque to be able to contain and eventually  defeat the very deadly virus,” said Gov. Velasco. “We were very glad [when the proposal] to set  up the molecular laboratory was relayed to us. Now we have the laboratory constructed. Indeed  this is a very important step in our plan to contain and eventually rid the province of the deadly  virus.”  

“AC Health and the Ayala Group are delighted to partner with the Province of Marinduque,” said  Borromeo. “Testing is a vital component of the country’s public health response, and we are  happy to support Marinduque’s initiatives to improve access to testing. We believe that the pub lic and private sectors must work together to beat this virus, save lives, and accelerate recovery.” 

“It is our privilege to partner with the Provincial Government of Marinduque for meaningful and  relevant initiatives like the molecular laboratory project, as well as various education and com munity programs,” said Maranan. “We continue to stand with the people of Marinduque, as they  stay resilient in the face of various challenges.”  

Aside from constructing the molecular laboratory, the Ayala group also provided various forms  of assistance for students, teachers, and health front-liners in Marinduque in the past month. 

Under the Brigada ng Ayala program, Ayala Foundation distributed at least 675 hygiene kits, 100  Globe Home Prepaid WiFI kits, and 4,000 children’s books (from a donation by UBS Securities  Philippines.), to be used by students and teachers from Boac Central School and 10 public ele mentary schools in the town of Torrijos. Teachers and students also received vitamin supple ments. Brigada ng Ayala is the Ayala group’s unified support for the Department of Education’s  Brigada Eskwela and Oplan Balik Eskwela programs.  

The foundation also turned over 1,250 face masks and 250 personal protective equipment (PPEs)  for use by health front-liners at the Marinduque Provincial Hospital.  

In addition, the town of Torrijos is one of the sites for ProFuturo, a digital education program  implemented in the Mimaropa region by Ayala Foundation. ProFuturo, which is implemented in  10 public elementary schools in Marinduque, uses digital technology to provide access to quality,  transformational, and universal education, and through it, access to equal opportunities for students. It focuses on enhancing teachers’ skills, methods, and competencies, and leveraging on  digital technologies.  

For more information:  

YLA ALCANTARA
Head, Brand and Reputation Management
Ayala Corporation
e-mail – alcantara.ypg@ayala.com

CELERINA AMORES
Senior Director, Corporate Communications 
Ayala Foundation
e-mail – amores.cr@ayalafoundation.org  

MANILA, April 23, 2021 – Today, after the company’s Annual Stockholders Meeting and as announced last December 2020, Ayala Corporation (AC) transitioned the position of Chief Executive Officer from Jaime Augusto Zobel de Ayala to Fernando Zobel de Ayala, who has been designated President and CEO. Jaime Augusto Zobel de Ayala will focus on his role as Chairman of the Ayala Board. Jaime and Fernando will continue to represent Ayala, retaining their current roles, as Chairman or Vice-Chairman, in the subsidiary boards of various Ayala group companies.

In his remarks, Fernando lauded Jaime for the latter’s outstanding leadership and track record of creating shareholder value in his 26 years of tenure as CEO. “Since 1995, our market capitalization expanded more than sixfold; our net income similarly grew more than six times. Since 1995, we rewarded our shareholders with dependable returns that averaged at 15 percent per annum. Over that period, we cumulatively paid P118 billion in dividends to our common shareholders.”  

Beyond the stellar financial returns, Fernando also cited and thanked Jaime for his strategic five-point legacy which Fernando said will serve as a firm foundation for Ayala Corporation’s future sustainable growth: 

1. Stronger, expanded and balanced portfolio mix. In the last 26 years, Ayala made massive and transformative investments in real estate, banking, telecommunications, energy, water, health, education, and logistics where large societal gaps exposed opportunities to serve a broader, more inclusive set of customers, generate meaningful returns and improve our risk-resilience;  
2. A culture of relevant and relentless innovation where Ayala’s inspired teams sparked new or enhanced solutions to remain relevant to the dynamically changing needs of customers;
3. Rigorous financial management discipline, thus enabling decisive investments to capitalize on opportunities and generate attractive returns, while strengthening risk-resilience especially in times of crises, including the current COVID-19 pandemic; 
4. Championing the alignment of Ayala’s corporate ambition and goals with world-class standards for sustainability; and environmental, social, and corporate governance; and
5. Placing Ayala at the forefront of the evolving role of corporations to address society’s pain points—to create inclusive and sustainable prosperity for all stakeholders and to aid in nation-building. 

“As incoming President and CEO, I aim to build on the firm foundation that Jaime established, guided by our core strategy of maintaining leadership and relevance in the markets we serve,” Fernando said.  “To support this, we will place greater emphasis on our portfolio strategy with a sharper focus on optimizing returns from existing businesses, a highly disciplined approach on capital deployment; and explore opportunities for value realization initiatives to fund future investments.” 

Fernando said that Ayala will continue to support the expansion of its core value drivers—Ayala Land, BPI, Globe, and AC Energy, while scaling up its healthcare and logistics businesses through AC Health and Entrego. In total, Ayala Group is allocating a combined capex of P196 billion in 2021.      

During the meeting, Fernando also congratulated three senior executives who have been given new roles in the Ayala Group. Ayala Corporation’s CFO, TG Limcaoco, takes the helm at BPI as President and CEO; upon the retirement of his predecessor, Bong Consing.  Bong will continue to be engaged with the Ayala Group as a member of the Board of Directors of BPI, Ayala Corporation, Globe Telecom and AC Energy Corporation. Albert De Larrazabal, most recently Globe’s Chief Commercial Officer, succeeds Limcaoco as AC’s CFO.  Eric Francia, current President and CEO of AC Energy, was appointed to concurrently chair AC’s Investment Committee. 

“We are cautiously optimistic about the business environment and will continue to prepare for a post-pandemic economic recovery. We are hoping for a successful implementation of the country’s vaccination program that would pave the way for a revival of the economy,” Fernando said. “With a healthy balance sheet and a set of diversified and strong franchises in our portfolio, we are confident that we will come out of this difficult period stronger.” #    

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For more information:

YLA ALCANTARA

Head, Brand & Reputation Management

e-mail – alcantara.ypg@ayala.com

FACTS AND FIGURES: 

AYALA’S PERFORMANCE IN 2020 & 2021 PRIORITIES

For the full-year 2020, Ayala Corporation reported a net income of P17 billion, 51 percent lower than the previous year. Much of this decline is attributed to non-recurring items, such as provisions booked by various businesses, an accounting reclassification, and the non-recurrence of divestment gains from its power and education units. Excluding such, the year-on-year contraction in Ayala’s net profits was at 16 percent. For 2021, the Ayala Group has allocated a combined capex of P196 billion to support the continued expansion of its core businesses and fund emerging opportunities in the healthcare and logistics sector.   

• In 2020, Ayala Land pioneered the country’s first real estate investment trust called AREIT, which raised P12.3 billion in proceeds and encouraged other property developers to launch their own REIT vehicles. For 2021, ALI has programmed P88 billion in capital expenditures. It is prepared to launch P100 billion-worth of residential projects as it gears for recovery in the next two to three years.    

• BPI’s substantial investments in digital transformation, over the last 3 years, enabled the bank to meet the changing, alternative banking needs of its customers; and become a leading digital bank. BPI’s mobile app was the most downloaded banking app during the pandemic. Fifty-two percent of the bank’s customers are now digitally enabled; more than half of them are active users; and an average of 70 percent of total transactions are now done online.   

• In 2020, Globe Telecom invested P60 billion in capital expenditure, 18 percent higher than in 2019. Globe built nearly 1,300 new cell sites, upgraded more than 11,500 sites to 4G/LTE technology, and deployed 5G sites in various cities and provinces. For 2021, Globe earmarked a record P70 billion in capital spending to support the shift in demand from mobile to home broadband.  

• Mynt’s GCash is now the number one finance app in the country, serving over 33 million users or one in every three Filipinos. With the exponential growth of GCash in 2020, not only has it topped the Finance App Category when it comes to active users, but it has also gone ahead of global social media and entertainment apps like Tiktok, Twitter, Netflix, Grab, Spotify, and Viber, based on App Annie, a reputable global app ranking authority. Last year, the value of transactions that passed through GCash crossed P1 trillion, which was double that of the combined totals for the three-year period of 2017 to 2019. GCash recently attracted USD175 million in fresh capital, including an investment from Bow Wave, a New York-based private equity fund. With a post-money valuation of nearly USD1 billion, this investment validates GCash as a formidable player in contributing to and transforming financial services in the country. 

• AC Energy has set a bold goal to build five gigawatts of renewable energy by 2025 and become one of the largest listed renewables platforms in Southeast Asia. In 2020, AC Energy continued its aggressive geographical expansion, and now currently operates in five markets—the Philippines, Vietnam, India, Indonesia, and Australia. It is transitioning to a low carbon portfolio and is committed to divest all its coal assets by 2030.   

• In 2020, IMI’s subsidiary, VIA Optronics, a leading supplier of enhanced display solutions, was listed on the New York Stock Exchange. VIA’s IPO resulted in proceeds of USD94 million, and a valuation that implied a 34 percent gain from its acquisition price. Meanwhile, IMI’s parent AC Industrials narrowed its losses to P1.8 billion in 2020, despite manufacturing disruptions during the year. It also posted a net profit in the fourth quarter after restoring plant operations to full capacity, improving factory efficiency, and optimizing margins from contract negotiations. AC Industrials’ array of disruptive technology is poised to ride on emerging megatrends around autonomous vehicles, more electronic components in automobiles, and green energy.  

• In 2020, Manila Water continued to deliver the necessary infrastructure towards the fulfillment of its service obligations, spending P12.1 billion in capital expenditures—81 percent was channeled to the East Zone Concession to carry out various projects on wastewater expansion, network reliability, and water supply. The entry of Trident Water of the Razon group to Manila Water will enable the regulated company to seek expansion opportunities locally and internationally. 

• Leveraging its nationwide reach, AC Infrastructure’s Entrego has gained a foothold serving major e-commerce players in the country. Over the past year, its revenues grew 10 times since 2018 and volume of packages delivered doubling since the start of the pandemic. It aims to expand its presence across the broader logistics supply chain, including contract logistics and freight forwarding.   

• AC Health is scaling up its portfolio to take advantage of the momentum in the healthcare ecosystem. It completed the acquisition of a majority stake in QualiMed Health Network last February, complementing AC Health’s 85 outpatient clinics and 80 corporate clinics under the Healthway brand, as well as the country’s first specialty cancer hospital, which is set to open in 2023. Its telemedicine brand, HealthNow, proves to be a great alternative medical consultation solution, alongside online purchasing of medicines and scheduling of onsite clinic appointments. Currently, HealthNow is the most downloaded medical app on App Store.  

• In 2020, the Ayala Group spent a total of P13.2 billion in various initiatives to help employees, partners, customers, the broader community and the country cope with the impact of the COVID–19 pandemic.

• When the government implemented ECQ on March 2020, Ayala’s first response was to protect employees and help assure their peace of mind, financially and physically/medically. An emergency assistance package, which consisted of a mix of wages, leave conversions, loan deferments, and advance release of employee bonuses, was rolled out so employees feel financially secure.   Contract workers who would have been on a “no-work, no-pay” dilemma (including personnel, maintenance staff, and construction workers) also received financial assistance from the Ayala group. Consistent with DOH mandate, strict health protocols were implemented to ensure the safety of essential workers who had to be physically present at work. Shuttle services, sleeping quarters, and regular testing were made available as well. 

• In 2020, Ayala sought to also protect its extended business community. Aside from offering loan payment extensions, waivers of fees and interest charges and rent reprieves to our partners and mall tenants, the Ayala group also launched the Ayala Enterprise Circle as a platform to engage, upskill, connect and empower the over 250,000 SMEs who are either clients or partners of Ayala.  

• For the broader Filipino community, Ayala worked with the Philippine Disaster Resilience Foundation and Caritas Manila on Project Ugnayan, where over 270 private entities convened to raise P1.7 billion worth of food vouchers for over 14 million of the most economically vulnerable individuals in the Greater Manila Area.  Ayala also actively contributed towards capacitating the national and local governments’ response to the pandemic. Through Task Force T3, Ayala converted the World Trade Center into a 502-bed isolation facility. It donated the swabbing booths for the national government’s four mega swabbing centers, and it also converted two QualiMed hospitals into COVID referral centers, complete with appropriate testing and critical care facilities, including ventilators. Together with the City of Manila, Ayala constructed a new molecular laboratory inside Sta. Ana Hospital. We also donated PCR machines and medical supplies to Quezon City and Davao City.  

• Ayala’s participation in T3 now encompasses support for the national government’s vaccine implementation roadmap – including strategy, procurement, administration, and communications. With the IATF, DOH, and the ICTSI Group, Ayala helped consolidate and finalize the private sector component of the tripartite agreement for the purchase of Moderna vaccines. Together with the 450,000 vaccines ordered from AstraZeneca, Ayala has procured 1 million doses, inclusive of our donation to the government. 

“We entered this pandemic with a strong balance sheet; and we navigated this unpredictably long, deep and complicated crisis with the strength of our balance sheet intact,” Fernando Zobel de Ayala noted. “This strength has allowed Ayala to sustain operations and service debt; and to provide generous support to our varied stakeholders at a time of crisis. It also gives us the continued capacity and flexibility to pursue potential opportunities.” #

Healthway Medical has formalized its partnership with Ateneo de Manila University School of  Medicine and Public Health (ASMPH) as the institution’s affiliate community clinic. With this  collaboration, 4th and 5th year medical students of ASMPH are granted the opportunity to  complete supervised training at Healthway’s clinics during their clerkship and internship.  

This development is in line with the existing partnership between AC Health and Ateneo  Professional Schools (APS) that focuses on healthcare advocacy, research, and recruitment and  training.  

The signing event was held on February 23, 2021, with Paolo Borromeo, President and CEO of AC  Health, Dr. John Paul Vergara, Vice President of Ateneo Professional Schools, and Dr Cenon  Alfonso, Dean of Ateneo Professional Schools as acting signatories. The event was also attended  by Paul Darroca, President and CEO of Healthway, Dr. Irene Limpo, General Manager of  Healthway Family Clinics, Dr. Suzanne Pama, General Manager of Healthway Multi-Specialty  Clinics, and Dr. Sonny Duran, Medical Affairs Head of Healthway.  

“AC Health and the Ateneo Professional Schools continue to work towards our shared vision of  creating an integrated healthcare ecosystem which relies on doctors that are more than just  clinicians, but are also dynamic leaders and social catalysts. We are excited to welcome future  Atenean doctors into Healthway and provide them opportunities to enhance their patient care 

advocacy, ensure their professional competence, and maximize the resources available for  learning and formation, especially in this time of crisis when we need them most,” said Paolo  Borromeo, President and CEO of AC Health.  

“ASMPH is excited to launch this program with AC Health and to provide an opportunity for our  students to train across Healthway’s clinic network. Through the years, we continue to take pride  in our Atenean doctors who have served in the leadership and medical teams of AC Health’s  network, and are excited to open up this experience to our students, working towards providing  quality and accessible healthcare to patients,” mentioned John Paul Vergara, Vice President of  Ateneo Professional Schools.  

The first batch of interns began their rotations last January at select Healthway Family and Multi Specialty clinics. Under this partnership, Healthway provides a venue for practical skills training  supervised by physician mentors from Healthway’s pool of physicians. This is in line with ASMPH’s  advocacy for health leadership, public health research, and community engagement.  

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For further details, please contact:  

Princess Acle  

Contact Number: 0977-866-0809  

E-mail Address: princess.acle@healthway.com.ph