Category: News

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Updated August 10, 2012

AYALA LAND, INC.

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

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

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

> Ayala Malls

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

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

BANK OF THE PHILIPPINE ISLANDS

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

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

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

GLOBE TELECOM

> Customer Service

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

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

> Relief Operations

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

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

> Globe Libreng Tawag

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

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

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

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

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

> Text Mo, Libre Ko

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

> Red Cross

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

MANILA WATER COMPANY

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

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

For concerns, call the Manila Water hotline at 1627.

AYALA FOUNDATION, INC.

> Ayala Young Leaders Congress

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

> Ayala Museum

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.