Category: News

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

South Luzon Thermal Energy Corporation, the joint venture company established by Ayala Corporation subsidiary AC Energy Holdings, Inc., and Trans-Asia Oil and Energy Development Corporation, to undertake the construction and operation of a 135-megawatt Circulating Fluidized Bed (CFB) power plant project, signed a P9-billion project loan facility with lenders Banco de Oro Unibank, Inc., Security Bank Corporation, and Rizal Commercial Banking Corporation. The loan will be used to fund the construction of the project which is expected to be operational by mid-2014.

Manila Water Company has been given the prestigious Asian Human Capital Award (AHCA) by the Singapore Ministry of Manpower, INSEAD, and CNBC Asia. It is the first Filipino company to win the award

The award, given to companies for their innovative and impactful human resource practices, recognized Manila Water’s transformation from a struggling, underperforming water utility, to a world-class water service provider.

The AHCA is considered a prime honor for its stringent standards. Its exhaustive selection process includes personal visits and research on all operational aspects of each nominee. In winning the award, Manila Water joins a select group of companies including Procter and Gamble, Ritz Carlton Singapore and Accenture Services India.

“We are deeply honored by this singular distinction which the Asian Human Capital Award has bestowed on us. It is an affirmation of the efforts that our people have invested in Manila Water in the last 14 years,” said Manila Water president and CEO Gerardo C. Ablaza, Jr. in accepting the award today at the Singapore Human Capital Summit 2011.

A Mission to Fulfill

“Manila Water’s experience of transformation is a unique one,” Ablaza shared. “It is a story about how providing a supportive environment that is conducive to productivity and openness while remodeling the system can pave the way to maximizing people’s full potential.”

Prior to Manila Water’s entry as a water service provider in 1997, the water situation in Metro Manila’s east zone faced serious challenges. Only 67% of the households then had piped water connections, with erratic water availability. Moreover, 63% or about 700 million liters of water per day was being lost to leaks and illegal connections.

As Manila Water began its operations in 1997, it saw an opportunity to enhance Filipinos’ quality of life. And as it created a long-term masterplan to renovate the water network, an organizational transformation was set in place.

Enabling and Empowering

The key lay in the hands of the new Manila Water organization. Absorbing over 2,000 former government employees or about 90% of the total workforce in 1997, the employees were found to be good, skilled workers, but lacked empowerment, being highly dependent on a centralized headquarters hierarchy then. Manila Water enabled these employees through training and in-house technical schools to maximize their productivity and potential. Equal opportunity for career advancement, even at the rank-and-file level, was given. A culture of merit based on performance and integrity was fostered, as well as the promotion of an entrepreneurial mindset, where managers were encouraged to run their assigned units as if these were their own business, looking for more innovative, efficient solutions with the customer’s needs in mind.

As people transformed, so did the organization through a decentralized setup that created better focus, productivity and accountability. Employees were transformed from mere followers to decision makers.

Manila Water also supplemented these changes with a robust and methodical Cadetship Program, an intensive six-month immersion for young graduates in all aspects of the business.

Transforming Into a World-Class Company

AHCA noted that Manila Water’s human capital programs and innovations have allowed the company to achieve remarkable improvements in all areas of performance, making the Ayala-led firm a leader in its industry.

Today, Manila Water is recognized as one of the world’s best in water efficiency. It is now branching out of Manila’s east zone, in markets such as the industrially advanced province of Laguna and the top tourist destination, Boracay; as well as other areas in the Asian region such as Vietnam and India.

Said Ablaza: “By believing in our people’s innate talents while complementing this with the proper training, support and rewards, Manila Water was able to transform not only its people but also the entire business. It is a partnership and a compact that have become instrumental in improving lives, building communities and contributing to nation building.”

Ayala reported a net income of P4.9 billion in the first half of the year, up 12% compared to the same period last year. The strong performance of its property, banking, water businesses as well as the sustained momentum of its telecom unit pushed equity earnings 9% higher to P6.2 billion.

Ayala president and chief operating officer Fernando Zobel de Ayala said, “The company’s results in the first half of this year reflect the positive economic environment and the robust domestic demand that has been sustained since last year. The aggressive moves of our business units to develop innovative products and services responsive to the needs of a much broader market have resulted in healthy revenue and earnings growth. We believe this momentum will continue through the rest of the year.”

REAL ESTATE
Ayala Land hit a record high in quarterly earnings in the second quarter, pushing first half net income 35% higher to P3.4 billion as revenues increased and margins expanded across its businesses. Revenues grew by 15% driven by strong residential sales and commercial leasing business. Property development revenues grew by 27% with steady completion and bookings of its projects. Residential project launches were well received resulting in record take-up in the second quarter. Revenues from the commercial leasing business of both retail and offices were up 17% as a result of improved occupancy and higher gross leasable areas. Revenues from other businesses such as Hotels and Resorts also improved reflecting a 25% growth year-on-year.

BANKING
Bank of the Philippine Islands saw double-digit growth in business volumes, revenues and net income. Net interest income increased by 12% and fee-based income rose by 7% year-on-year. Despite an 11% increase in operating expenses due to one-time CBA-related payments, the bank’s net income grew by 11% to P6.2 billion. Loans to customers increased by 16% driven the 24% growth in middle market loans, 20% increase in SMEs, 15% rise in top tier corporate loans and a 13% increase in consumer loans. Despite an expansion in loan book, asset quality continued to improve with non-performing loan ratio down to 1.8%.

TELECOM
Globe Telecom sustained the momentum of its mobile and broadband businesses with consolidated revenues reaching a new high of P16.6 billion in the second quarter. This put total service revenues in the first half of the year to P33 billion, 7% higher than last year’s. This was achieved despite a market that remains fiercely competitive and amidst price and cost pressures. Revenue growth was broad-based with mobile revenues up 5% as bulk and unlimited voice and SMS services continued to grow, along with mobile browsing revenues. Its broadband revenues jumped by 42% as a result of robust subscriber growth and stabilizing ARPUs. Globe’s mobile subscribers reached 28.4 million by the end of June, 15% higher year-on-year. Its broadband subscriber base also reached a new high of 1.3 million. As robust revenue growth outpaced the rise in operating expenses and other costs, consolidated EBITDA margin held steady at 55%. Net income in the first six months of the year rose by 9% to P5.5 billion with core net income at P5.6 billion.

WATER
Manila Water achieved steady growth in revenues and earnings. Revenues grew by 6% in the first half of the year to P5.8 billion driven by a combination of tariff adjustment and modest billed volume growth from the East concession zone and from operations in Laguna and Boracay. Net income increased by 2% to P2 billion. Manila Water’s customer base continued to expand with 36,000 new service connections coming from the current area as well as expansion areas in the East Zone. Non-revenue water continued to improve across all the three service areas ending at 11.5% in the East zone from 13.5%, 38% in Laguna from 44%, and 24% in Boracay from 35%.

AUTO
Ayala’s auto dealerships registered a 22% decline in revenues in the first half of the year due mainly to lower vehicle sales as a result of supply disruptions expected to last until the fourth quarter of the year. This resulted in a 71% decline in net income to P50 million in the first semester. Despite lower sales, however, Ayala dealerships maintained network leadership accounting for 46% of Honda and 32% of Isuzu sales nationwide.

ELECTRONICS
Integrated Microelectronics, Inc. recorded healthy revenue growth with sales up 39% year-on-year, which includes the sales of recently acquired PSi Technologies. China operations grew by 23% while IMI Philippines’ operations also posted growth of 6% driven by volumes from key customers. Higher direct labor costs, however, resulted in a decline in gross profit and margins in the first half of the year, which put net income excluding one-offs 52% lower during the period.

BUSINESS PROCESS OUTSOURCING (BPO)
The investee companies of LiveIt, our holding company for BPO investments, also achieved healthy revenue growth. Combined revenues were US$489 million in the first half of the year, of which LiveIt’s share was US$152 million, 16% higher than last year, due to the growth of client volumes across all investees. Greater scale and cost efficiencies resulted in LiveIt’s share of EBITDA increasing by 55% to US$11 million, Operating Net Income improving to a profit of nearly $1 million, and Reported Net Loss declining to $12 million. The Reported Net Loss was driven largely by non-cash charges such as amortization of intangibles for Stream and Integreon’s acquisitions, and interest expense related to the leverage buyout of Stream.

Ayala parent company ended the period with nearly P30 billion in cash and a net debt to equity ratio of 0.17 to 1. It successfully raised P10 billion from the issuance of its multiple put bond last May and subsequently redeemed its P5.8B preferred B shares last July.

Ayala recently made inroads in the power sector as it gears up to build a portfolio of power generating assets in both renewable and conventional sources. It recently closed a joint venture agreement with Trans-Asia Oil and Energy Development Corp., a subsidiary of the Phinma Group for the construction and operation of a 135-MW thermal plant in Calaca, Batangas.

The above statement pertains to the disclosure made today, August 12, 2011, to the Securities and Exchange Commission, Philippine Stock Exchange, and Philippine Dealing and Exchange Corporation, by Ayala chief finance officer Delfin Gonzalez, Jr.

Two of the country’s largest conglomerates are joining forces to augment the country’s power generation capacity.

Ayala Corporation, through its wholly-owned subsidiary, AC Energy Holdings, Inc. (AC Energy, formerly Michigan Power, Inc.), and PHINMA, Inc., through its energy arm, Trans-Asia Oil and Energy Development Corporation (Trans-Asia), have signed today a joint venture agreement for the construction and operation of a thermal power plant in Calaca, Batangas.

The joint venture company to be formed will be owned 50 percent by Trans-Asia and 50 percent by AC Energy.

The 135-megawatt power plant will employ the environment-friendly Circulating Fluidized Bed boiler technology. Total project cost may reach approximately P 12 billion and will be financed by a combination of debt and equity. The plant is expected to start commercial operations by mid 2014.

According to PHINMA president and Trans-Asia vice chairman Ramon R. Del Rosario, Jr., “We are glad to be partnering with the Ayala group in this joint venture project. We look forward to leveraging each other’s strengths in developing and running a modern and environment-friendly facility that will contribute to the country’s power supply generation through conventional source using clean technology.”

For his part, Ayala president and chief operating officer Fernando Zobel de Ayala said, “This project is part of our strategy to build a portfolio of power generation assets that combines conventional and renewable energy sources. This project will help contribute to building the much needed base load capacity to meet the growing demand for power in Luzon. This is simultaneous to our efforts to contribute in the development of alternative energy sources.”

Ayala, through AC Energy, recently formed several joint venture agreements to develop solar and mini-hydro power projects across various sites in the Philippines. It also recently acquired a 50 percent stake in Northwind Power that operates the wind farm in Bangui, Ilocos Norte.

Trans-Asia, through its wholly-owned subsidiary, Trans-Asia Renewable Energy Corporation (TAREC) has aggressively pursued the development of renewable energy and has been awarded service contracts with potential wind capacity of 350 MW, making it one of the largest wind developers in the country today.

ING Bank N.V. acted as financial advisor to Trans-Asia in the transaction.

Five Ayala companies led by parent company Ayala Corporation were ranked Platinum awardees in the Institute of Corporate Directors (ICD)’s 6th Annual Corporate Governance Scorecard for Publicly Listed Companies.

AC, Ayala Land, Globe Telecom, Manila Water Company, and Cebu Property Ventures Development Corporation were all given Platinum awards at the ICD Annual Dinner held on May 25 at the Peninsula Manila. This is the first time that the ICD has bestowed Platinum awards to companies that have garnered Gold awards for at least three consecutive years.

Explained ICD chairman Jesus Estanislao: “Platinum awardees carry the distinction of being the very best companies in terms of corporate governance compliance and which we believe are very well disposed to move beyond compliance and into higher levels of corporate governance standards and practices observed globally.”

All eight listed companies of the Ayala group made it to the Top 20 scorers of the 2010 Corporate Governance Scorecard.

Ranked in the Gold category were Cebu Holdings and Integrated Micro-Electronics, a new entrant to the ICD Scorecard Project after listing by way of introduction in the Philippine Stock Exchange last year. Both companies scored 95% or above in the governance scorecard.

Ranked in the Silver category with the rating of 94.9% was Bank of the Philippine Islands.

A non-stock, non-profit organization, ICD works closely with the Organisation for Economic Co-Operation and Development (OECD), the Global Corporate Governance Forum, and the International Corporate Governance Network on improving actual boardroom practices in the Philippines. ICD is a founding member and permanent secretariat of the Institute of Directors in East Asia Network.

For the last six years, ICD’s Corporate Governance Scorecard has been used by publicly listed companies as a tool to rate and benchmark their corporate governance practices relative to global and regional standards. The project is jointly administered with the Securities and Exchange Commission, PSE, Institute of Internal Auditors of the Philippines, Ateneo Law School, and Center for International Private Enterprise.

The scorecard ranks publicly listed companies in the areas of shareholder rights, equitable treatment of shareholders, role of stakeholders in governance, disclosure and transparency, and board responsibilities—key governance principles used as basis for corporate governance practices globally.

The awards were received by senior officers of the Ayala group led by AC senior counsel Mercedita Nolledo, AC general counsel Solomon Hermosura, presidents Gerardo Ablaza, Jr., Antonino Aquino, and Francis Monera, CFOs Jaime Ysmael, Albert Larrazabal, and Luis Juan Oreta, BPI senior executives Antonio Paner and Myra Sylienteng, and IMI controller Jaime Sanchez.