Category: News

Ayala Corporation’s net income in the first quarter of 2011 grew by 16% to P2.45 billion. This was driven by the robust revenue and earnings growth of its real estate business, the solid growth of its banking operations, the sustained turnaround of its telecom unit and healthy core earnings of its water business. These business units accounted for the bulk of equity earnings. Total equity earnings during the quarter rose by 16% year-on-year.

“We are pleased with the growth momentum of the majority of our domestic businesses,” said Ayala president and chief operating officer Fernando Zobel de Ayala. “Their continued expansion across new and existing markets across the country will translate to increased market presence, greater exposure across a broader more diverse customer base, and a higher earnings growth trajectory for the group moving forward.”

Ayala Land, Inc.’s earnings in the first quarter of the year reached P1.6 billion, 36% higher than same period last year. Revenues reached P10.6 billion, up 15% year-on-year driven by robust residential and higher commercial leasing revenues. Residential revenues grew by 18% fuelled by the strong take-up and bookings across all residential brands. The company launched a total of 4,511 units during the quarter mostly from Alveo and Avida. Commercial leasing revenues increased by 16% largely from the 11% growth of shopping center revenues and the 25% rise in office leasing. Both posted higher lease rates as well as improving occupancy rates. Revenues from its hotels and resorts portfolio improved by 16% with the consolidation of its acquisition of 60% of El Nido Resorts which added 150 island resort rooms to its current portfolio. New projects are scheduled to come on stream. It recently opened Abreeza Mall, a 53,000-square-meter shopping center at the heart of Davao. It also broke ground on its new hotel, Kukun, in Cagayan de Oro.

Bank of the Philippine Islands registered first quarter net income of P2.9 billion, up 4% year-on-year. Revenues rose by 5% due mainly to higher interest income which rose by 15% to P6.3 billion as average asset base expanded by 12%. Loan growth remained healthy with net loans up 13% due to strong middle market/SME and consumer loans which rose by 22% and 15%, respectively. Corporate loans likewise grew albeit at a milder pace of 6%. Non-interest income, however, contracted by 9% due to lower gains from securities trading and foreign exchange and miscellaneous income. The bank’s total resources increased by 9% to P761 billion as deposits grew by 8% to P604 billion, while assets under management increased by 40% following its acquisition of the trust and investment management business of ING N.V. Manila.

Globe Telecom sustained its turnaround and posted record quarterly revenues of P16.5 billion in the first quarter, 8% higher year-on-year. The growth was driven by the continued uptick in its mobile business as well as the sustained growth momentum of the broadband segment. Mobile revenues rose by 4% driven by a 10% growth in postpaid revenues and a 2% increase in prepaid. Broadband and fixed-line revenues grew by 26% with broadband achieving a 52% increase year-on-year. Globe’s mobile subscriber base further increased to 27.3 million, a 14% expansion year-on-year while broadband subscribers rose by 40% to nearly 1.2 million. Subscriber growth improved with the launch of new and relevant services that allowed subscribers greater flexibility to customize their plans. Globe’s net income of P3 billion was the highest in the past seven quarters and was also 30% higher than the prior quarter.

Manila Water’s net income declined by 3% to P816 million largely as a result of mark-to-market losses realized on its bond. Excluding this, core income was up 14% to P1.2 billion. Revenue growth was healthy, up 5% to P2.7 billion due to an 11% increase in tariff and a 6% increase in household connections. Operating expenses increased mildly by 4% with well-controlled overhead and manpower costs. Non revenue water of 11.9% was better than same period last year of 14.2%. Manila Water continues to invest in the development of sewage and septage treatment facilities and is expanding aggressively outside its concession zone.

Ayala Automotive’s net income fell by 63% due to lower vehicle sales of its Honda dealerships, which declined by 27%. Ayala’s Honda dealerships remained the market leader with a 46% share of network sales. Its Isuzu dealerships recorded a 4% growth in sales and registered a percentage point improvement in market share to 32%.

Ayala’s international businesses showed healthy topline growth. Its electronics business, Integrated Micro-Electronics, Inc. registered a 35% growth in revenues to US$123 million but net income declined by 88% to US$374 thousand. The increase in turnkey operations which now account for 82% of revenues combined with higher direct material cost contributed to the margin pressure and earnings decline. Moreover, a one-time FX gain in 1Q10 contributed to the year-on-year decline in net income.

Its BPO unit LiveIt, also showed improvement. The combined revenues of LiveIt’s investee companies grew by 9% to US$243 million in the first quarter, and their EBITDA grew by 45% to US$22.5 million. LiveIt recorded operating net income of US$0.6 million, versus an operating net loss of US$3.1 million in the same period last year. In April, investee company HRMall, which offers outsourced HR services, acquired Los Angeles-based IQ BackOffice, which delivers finance and accounting BPO services and enables HRMall to offer a full range of highly efficient, market leading back office solutions to medium-sized clients globally.

AG Holdings also reversed losses incurred in the same period last year and reported a net income of P258 million in the first quarter. Its Asian operations posted a net income due mainly from gains realized from the exchange in ownership in Arch Capital and Arch Capital Asian Partners with The Rohatyn Group. Its US operations, however, continued to lose in the absence of any meaningful recovery in real estate markets in the U.S.

Outside of its current portfolio of businesses, Ayala recently made an initial foray in the power sector as it seeks to assemble a portfolio of power assets across various technologies. Following its joint venture with Mitsubishi Corporation for the development of solar energy in the Philippines, it acquired a 50% stake in Northwind Power Corporation, the operator of the first wind farm in Southeast Asia. It also forged a joint venture agreement with Sta. Clara Power Corp. for the development of run-of-the-river hydroelectric projects across the country.

Zobel commented that these investments will ultimately form part of a portfolio that balances renewable and conventional energy sources to meet the country’s need for base load capacity.

Ayala ended the quarter with cash of nearly P28 billion. It also recently successfully issued a P10 billion multiple put bond as it tapped sources of long-term funding in view of potential investments it is eyeing in the power and transport infrastructure sectors.

The above press statement pertains to the disclosure made today, May 13, 2011, to the Securities and Exchange Commission, Philippine Stock Exchange, and Philippine Dealing and Exchange Corporation, by Ayala managing director and head of corporate strategy and development, John Eric T. Francia.

Ayala Corporation today signed the underwriting agreement to issue a P10-billion fixed rate multiple put bond with a rate of 6.80%. Pricing was based on the past 15-day average of the PDST-R2 plus a spread of 30 basis points, consistent with the latest auction results for the 10-year fixed rate treasury notes which had a rate of 6.50%.

Ayala tapped BPI Capital Corporation as the issue coordinator for the deal. The joint underwriters are BDO Capital Corporation, BPI Capital Corporation, Citicorp Capital Philippines, Inc., First Metro Investment Corporation, Hong Kong and Shanghai Banking Corporation Limited, ING Bank, N.V., Manila Branch, RCBC Capital Corporation, and Standard Chartered Bank

Indicative demand for the bonds was strong, at an estimated P23 billion. The 10-year bond will mature in 2021, but will have multiple put options in 2016 and 2019.

Proceeds of the bond will be used to refinance the company’s P5.8-billion Preferred “B” shares whose call option was exercised by Ayala for payment on July 2011. The balance will be used to fund Ayala’s working capital requirements.

The bonds were Rated PRS Aaa by Philratings. The offer period for the bond is set for May 2 to May 6, with issue and listing date set for May 12.

This issue aims to attract retail investors who want to invest long-term funds. The bond structure provides two liquidity features, first through the 20% partial put option on the fifth year and subsequently the 100% full put option on the eighth year. This encourages investors to go beyond the normal five-year tenor. As an incentive for going longer tenor, investors get a better rate compared to the five-year rate of around 1 to 1.25%, and with an option to hold on to the same rate up to 10 years.

“The issue is the first in many aspects—the first multiple put bond in the market and the first corporate issue for 10 years for a P10-billion size. Our bond also has the lowest coupon rate of 6.80%,” according to Ramon G. Opulencia, treasurer of Ayala Corporation.

Integrated Micro-Electronics, Inc. (IMI), a leading provider of electronics manufacturing services (EMS), power semiconductor assembly and test services in the Asian region, today announced that it has entered into an agreement with EPIQ NV (“EPIQ”), for the acquisition by IMI of the EPIQ subsidiaries in Bulgaria, Mexico and the Czech Republic.

The purchase consideration of approximately €43 million will be a combination of cash and 200 million newly-issued IMI shares representing approximately 12% ownership in common shares on a fully diluted basis.

As part of IMI’s strategic initiatives, the acquisition will enable IMI to establish a global geographic footprint in manufacturing as well as in technology development and engineering.

Arthur R. Tan, IMI president and chief executive officer, said, “IMI is pursuing this valueenhancing acquisition to expand its customer base and to support its market specialization strategy in the automotive and industrial segments. As regional manufacturing picks up steam, we are expanding our operations to locations near our global customers in Europe and North America to be of better service to them.”

Following the completion of the acquisition, Gilles Bernard, EPIQ chief executive officer, will join the management team of IMI. Mr. Bernard said, “We are glad to become part of the IMI Group and look forward to providing EPIQ and IMI customers the access to a vastly increased range of facilities and capabilities.”

The acquisition is expected to be completed no later than the fourth quarter of 2011. ING Bank N.V. is acting as financial advisor to IMI in the transaction.

About IMI
Integrated Micro-Electronics Inc. (IMI) is a leading provider of electronics manufacturing services (EMS) and power semiconductor assembly and test services. It serves diversified markets that include those in the automotive, industrial, medical, solar energy, telecommunications infrastructure, storage device, and consumer electronics industries. Committed to cost-effective and top-quality customized solutions, IMI’s comprehensive capabilities and global manufacturing presence allow it to take on specific outsourcing needs. IMI’s flexible solutions encompass design and product development, manufacturing, and order fulfillment. IMI is consistently ranked among the top 30 EMS providers in the world. A subsidiary of Ayala Corporation, IMI is listed in the Philippine Stock Exchange. IMI has manufacturing and engineering facilities in the Philippines, Singapore, China, and the U.S.A. For more information, visit www.global-imi.com.

About EPIQ
EPIQ is an EMS provider that designs, produces, and sells electronic and electro-mechanical systems and sub-systems. These are drive- and/or control elements especially for supply in the automotive and industrial equipment markets, household appliances, and other applications with plastic parts and/or electronic components. EPIQ provides a wide range of integrated services from product development to mass production. Production comprises the design of printed circuits and/or spray casting of plastics up to and including the supply of assembled and tested systems and sub-systems. EPIQ also provides all the required engineering, R&D, and logistics management. EPIQ is headquartered in Europe with manufacturing and engineering facilities in France, Bulgaria, the Czech Republic, and Mexico. The EPIQ subsidiaries subject of the transaction generated a combined turnover of €90 million and net income of approximately €4 million for the financial year ended 31 December 2010.

The above press statement is from the disclosure made today to the Securities and Exchange Commission and the Philippine Stock Exchange by IMI.

Ayala Corporation through its wholly-owned subsidiary Michigan Power Inc. (MPI) entered into a joint venture (JV) with Sta. Clara Power Corporation (SCP) for the development of run-of-the-river (ROR) hydroelectric power projects across the Philippines.

MPI will take a 70% stake in the JV and has committed an initial equity infusion of about PhP 600 million.

The JV follows the company’s recent partnership with Mitsubishi Corporation for solar power and its acquisition of 50% of the iconic Northwind project in Ilocos for wind power. These are all in line with Ayala’s campaign to augment the country’s power supply primarily through renewable and clean energy.

ROR hydroelectric power plant operation involves “borrowing” some river water to turn its kinetic energy into electricity, and returning the same unpolluted water back into the river. It is “green” because it does not produce harmful emissions. Like other renewable power technologies, it is economical as it depends on the “free” energy of nature as fuel.

Ayala Corporation President and Chief Operating Officer, Mr. Fernando Zobel de Ayala said, “This venture builds on our current portfolio of renewable energy assets, which focuses on solar, wind and hydro power technologies. This is an important component of our plan to create a portfolio of power assets over the medium term that blends conventional and sustainable energy sources and contribute to the country’s energy requirements.”

Ayala Corp is one of the largest Philippine conglomerates with diversified business interests including investments in real estate, banking, telecommunications, water infrastructure, electronics, automotive, information technology, business process outsourcing and, recently, renewable energy.

Sta. Clara Power is a power generation company that focuses on ROR hydropower. It is majority-owned by Sta. Clara International Corporation, a construction company with local and overseas projects. Among Sta. Clara Power’s holdings, which will not be part of the JV, are stakes in Loboc hydro, Amlan hydro, and Bakun IPPA.

In its annual stockholders’ meeting held April 18, 2011, Ayala Corporation chairman and chief executive officer Jaime Augusto Zobel de Ayala revealed its group companies are raising capital expenditures to P79 billion in 2011, 21% higher than what it spent in 2010. The bulk of these investments are directed to its domestic businesses, particularly in real estate, telecommunications, water, and banking units as well as new investments in the power and infrastructure sectors.

Zobel said, “The Ayala group is maintaining its focus on its domestic businesses and is looking to maximize growth by broadening customer reach and expanding to new growth centers across the country. The Philippine macro-economic environment has shown positive trends and we intend to participate in a number of the growth opportunities that have emerged.”

Ayala’s businesses have been successful in its traditional markets, which continue to grow and maintain a significant presence. Last year, earnings of its real estate, banking, water, and auto businesses reached new highs, while performance of its telecom business rebounded in the fourth quarter of 2010 posting its highest quarterly service revenues on record.

Zobel pointed out, “Our domestic businesses will continue to be a major source of growth given their compelling market positions, healthy cash flows, high profitability and ability to consistently deliver strong returns to shareholders.” Ayala delivered total shareholder return of 31% in 2010 and consolidated net income of P11.2 billion, up 37% from prior year.

Ayala’s businesses are increasingly tapping customers beyond the mainstream market with product and service innovations that are attuned to this segment. Its real estate unit, Ayala Land, Inc. launched Amaia, a new brand serving the economic housing segment to meet the growing demand for housing at much lower price points. Ayala’s mobile microfinance venture with Bank of the Philippine Islands and Globe Telecom, which is a first in the country, was also launched in 2010 and has since extended P1.1 billion in microfinance loans to 40 microfinance institutions that reach out to 200,000 microfinance customers. Its water unit, Manila Water is reaching out to over 1.6 million customers in low-income sectors under its “Tubig Para Sa Barangay Program”.

Parallel to these, Ayala is eyeing investments in the power and infrastructure sectors. In 2010 Ayala formed a joint venture with long-time partner Mitsubishi Corporation under PhilNewEnergy, Inc. to develop solar power plants in select sites in the Philippines. Early this year, it also acquired a 50% effective stake in Northwind Power Corp. which operates a 33-megawatt wind farm in Bangui, Ilocos Norte, the first wind farm ever established in Southeast Asia. Mr. Zobel envisions Ayala to assemble a portfolio of power assets over the medium-term comprising both renewable and conventional energy sources that balance the cost of energy delivery alongside sustainable practices.

Ayala president and chief operating officer Fernando Zobel de Ayala said, “The company is in an excellent position to invest in sizable projects, without impairing value-enhancing initiatives such as our on-going buy-back program, dividend pay-outs and meeting our funding requirements. We have kept a healthy cash level which as of year-end 2010 amounted to P29B.”

Ayala continues to expand overseas, albeit selectively. Its water unit, Manila Water Company, Inc. recently submitted a bid for a water distribution and non-revenue water reduction project in Bangalore, India. It also continues to explore water projects in Vietnam in partnership with Mitsubishi Corporation. Its electronics business, Integrated Micro-Electronics, Inc. (IMI) opened its sixth manufacturing plant in China and continues to explore acquisitions to build on its current capabilities. Meanwhile, its business process outsourcing unit under LiveIt continues to explore other high growth sectors.

In the same meeting the company’s shareholders approved the declaration of a 20% stock dividend on common shares and an increase in the company’s authorized capital stock from P37 billion to P56 billion as well as the creation of 40 million preferred shares.

Ayala Corporation’s Business Process Outsourcing (BPO) investment company, LiveIt Investments Ltd., announced today that its investee company HRMall, which provides outsourced IT-enabled HR services out of Manila, has entered into a definitive agreement to acquire IQ BackOffice, LLC of Los Angeles, California, which delivers high quality, software-enabled, real-time, SAS70 Type II-certified finance and accounting BPO services to mid-sized companies in the U.S. IQ BackOffice targets companies with annual revenues of $50 million to $1 billion, but its business includes clients with revenues up to $10 billion.

The combined companies are valued at approximately $15 million. The management team of IQ BackOffice LLC, including David Schnitt, its founder and CEO, will purchase a 17.5% ownership interest in HRMall. LiveIt will own the balance of 82.5% of the company and will support the company’s strategy to accelerate its growth in its current markets in the U.S. and Asia.

HRMall will now be able to provide a complete suite of low-cost, best-in-class HR, finance and accounting services to the underserved mid-sized enterprise sector in the US and Asia, through a combination of proven technology, proprietary software and processes, deep domain expertise in multiple industries, and efficient outsourced operations that enable its clients to gain world-class back office capabilities while achieving 30% to 50% annual cost reduction. HRMall’s clients will now include over 30 US companies in the manufacturing and distribution, restaurant, hotel and hospitality, retail, professional services, property management, financial services and other industry sectors, as well as members of the Ayala group of companies (including Ayala Corporation, Ayala Land, Bank of the Philippine Islands, Globe Telecom, Manila Water and IMI). The Company will operate as HRMall in Asia and IQ BackOffice in the US, and will employ a total of over 300 employees out of its centers in Manila, Chennai, Mumbai and Los Angeles.

David Schnitt, who before starting IQ BackOffice had previously co-founded NASDAQ-listed professional services firm Resources Global Professionals, will be appointed Chief Executive Officer of HRMall, while Gilbert Santa Maria, a senior adviser to LiveIt who had previously headed eTelecare Global Solutions’ (now Stream Global Services) Philippines operations and global M&A, will be appointed chief operating officer and chief finance officer. Both will be based in Los Angeles, California. The management team of IQ BackOffice in the U.S. and India will be combining with the Manila-based HRMall leadership team.

IQ BackOffice’s founder and CEO, David Schnitt said: “I believe that HRMall’s existing HR services such as payroll are very complementary to the services we provide to our existing clients in the US, and that the Philippines greatly complements our service delivery capabilities from India and the US. Furthermore, LiveIt’s investment strategy and philosophy are very much in alignment with our operating philosophy, and its leadership team has the knowledge and experience to help us achieve our growth plans. I am very much looking forward to working with HRMall and the Ayala group of companies to create significant long-term value for our clients, associates and shareholders.”

John Philip Orbeta, chairman of HRMall, stated, “The combination with IQ BackOffice will allow us to achieve our vision of offering a full range of highly efficient, market leading back office solutions to medium-sized clients around the world. We warmly welcome the IQBackOffice team into the Ayala family.”

Fred Ayala, CEO of LiveIt, added, “This acquisition by HRMall adds a high growth, high margin and very complementary business to HRMall, with numerous cross selling and operating efficiency opportunities, and is expected to create significant value for LiveIt.”

All of the stockholders of HRMall and IQ BackOffice have approved and signed the sale and purchase documents. The transaction is subject to customary closing conditions, and is expected to close before April 30, 2011.

About HRMall
HRMall, Inc. is a BPO company focused on providing Human Resource related services – including outsourced payroll – to clients in the Asia Pacific region. Its processing and data centers are located in Manila, Philippines. It implements, deploys, hosts and processes technology-enabled HR systems, including Peoplesoft HCM, to its clients. It also provides talent management solutions, allowing human resources professionals to strengthen and personalize employee experiences, resulting in a more motivated and engaged workforce. HRMall provides outsourced services to clients across a wide variety of industry sectors including telecommunications, banking and financial services, utilities, BPO, real estate, retail, construction, property management, resort management, management services, cooperative, and high-tech manufacturing. It currently services clients with employee counts from 100 to 12,000, and has the capability for full-scale ERP implementations or pre-configured SaaS-type requirements. Additional information is available at www.HRMall.com.ph.

About IQ BackOffice
IQ BackOffice is a comprehensive Finance and Accounting BPO provider to the underserved segment of Mid-Sized Enterprises in the US with annual revenues between $50 million and $1 billion. It is headquartered in Los Angeles, CA with operations in Los Angeles, Chennai and Mumbai. Services include accounts payable, accounts receivable, payroll and complete general accounting outsourcing. IQ BackOffice leverages its proprietary software platform to enable IQ BackOffice and its clients to manage processes at world-class levels across the enterprise. IQ BackOffice is SAS70 Type II certified. It has over thirty public and private company clients across multiple industry verticals, including restaurants, manufacturing and distribution, hotels, entertainment, property management, financial services and other industries. IQ BackOffice employs over 200 people in the US and India and has an experienced management team with deep finance and accounting domain expertise. Additional information is available at www.IQBackOffice.com.

The above statement was based on the disclosure made today, April 18, 2011, to the Securities and Exchange Commission and Philippine Stock Exchange, by Ayala general counsel and compliance officer, Solomon M. Hermosura.

Ayala Corporation, through Michigan Power, Inc., a 100%-owned subsidiary, acquired a 50% effective stake in NorthWind Power Development Corporation (NorthWind). NorthWind owns and operates the 33-MW wind farm located in Bangui Bay, Ilocos Norte. The wind farm has 20 wind turbines and is the first commercial wind farm ever established in Southeast Asia. The 50% stake was acquired from existing shareholders of NorthWind.

This is part of Ayala’s initiative to enter the power sector and comes after the company’s recent joint venture with Mitsubishi Corporation on solar power. Ayala Corporation President and COO, Mr. Fernando Zobel de Ayala said, “Our goal over the next five years is to build a portfolio of power generation assets of over 1,000 megawatts, which include both renewable and traditional forms of energy sources. We believe there are opportunities to make early stage investments in the renewable energy space which may have the potential to grow over time given the need to develop alternative sources of energy. In addition to our wind and solar initiatives we are also developing platforms for hydro electric power.”

The above disclosure was made by Ayala managing director for corporate strategy and development Eric T. Francia.

Ayala Corporation’s net income in 2010 grew by 37% to P11.2 billion. Its real estate, banking, water, and auto business all posted record earnings during the year, which cushioned lower earnings of its telecom and electronics manufacturing units. Earnings were boosted by a P3.6 billion net gain. The net gain was due to the revaluation of the company’s stake in Manila Water following its purchase of an additional 11% stake in the water company and in its BPO holding company, LiveIt, after the buy-in of a private equity firm in one of its investee companies. These revaluation gains were in turn partly offset by impairment provisions and restructuring costs at its international real estate unit, AG Holdings.

Ayala Corporation president and chief operating officer Fernando Zobel de Ayala said, “We are pleased with the record performance and strong growth trajectory of most of our domestic businesses. This reflects our ability to take advantage of the strong economic recovery and capture opportunities in this new growth cycle. Our international businesses, however, continued to feel the lingering effects of the global downturn but should be well-positioned for the turn of the global economy.”

Ayala Land achieved record earnings of P5.4 billion on all-time high revenues of P37.8 billion. This was 35% higher than prior year and 13% above the previous record high in 2008. Growth was driven by all business lines. Take-up values of residential units across all brands grew significantly with incremental contribution from its fourth residential brand, Amaia. Its leasing revenues rose by 13%. Revenues from shopping centers grew by 3% while the office segment rose by 21%. Occupied gross leasable area expanded for commercial center and offices by 5% and 35%, respectively, while rental rates increased slightly. In the meantime, revenues from its new foray in hotels and resorts also rose by 33% reflecting the consolidation of the acquisition of 60% of El Nido Resort in Palawan. This year Ayala Land is allotting P33 billion in capital expenditure to increase project launches and further capture the strong demand for its real estate products within and outside Metro Manila.

In banking, Bank of the Philippine Islands had another strong year with net income reaching a record P11.3 billion, up 33% for the second consecutive year. Solid business growth and trading gains both fuelled the rise in earnings. Revenues rose by 13% with net interest income up 10% to P24 billion driven by a 12% increase in its average asset base. Non-interest income was up 18% due to higher gains from securities trading as well as fee-based income. Loan growth was strong across all segments. Gross loans grew by 16% as all market segments sustained double-digit growth. The bank’s total resources reached P877 billion, up 21% while deposits grew by 24% to P720 billion as the bank introduced new deposit products to address the needs of its various customers. Combined with assets held in trust of P486 billion, total funds managed by the bank reached P1.2 trillion. BPI’s performance resulted in a 2.6 percentage point improvement in return on equity which reached 15.3% at year-end.

In telecom, Globe posted consolidated service revenues of P62 billion in 2010, slightly below prior year’s P62.4 billion due to intense competition. Performance in the fourth quarter was strong with quarter-on-quarter service revenues up by 7%. This was led by the surge in postpaid plan subscriptions and the increased usage and top-ups in both the Globe Prepaid and TM brands. Globe ended the year with a total SIM base of 26.5 million, 14% higher than in 2009. Steady gross adds and declining churn led to net SIM adds of 1.1 million in 4Q10, the highest since 2Q08. Postpaid net adds also hit a new 7-year high in the fourth quarter resulting in nearly 1.1 million postpaid customers by year-end. Its broadband and fixed line service business also grew with full year revenues up 32% compared to 2009. Globe net income of P9.7 billion was 22% lower than prior year, but reflects an improvement from prior quarters. Globe’s capital expenditure reached P19.5 billion in 2010 mainly to improve network performance, increase mobile and broadband capacities, and improve customer service capabilities.

Its water business under Manila Water Co. posted net income of P3.99 billion in 2010 as a result of steady growth in water sales volume and a one-time downward adjustment on its depreciation expense. Billed volume grew by 3.5% despite the El Nino condition which impacted the water allocation for Metro Manila’s requirements during the year. The company’s investments in the water network contributed to improving non-revenue water further to 11% in 2010 from 15.8% the prior year. This enabled the company to ensure 24/7 delivery of water service to its customers despite the effects of El Niño. In 2010 Manila Water invested at total of P9.6 billion to further improve the reliability and expand coverage of its water and wastewater networks. Manila Water aims to invest more than P10 billion annually for the next two years for the development of new water sources, network reliability improvements, as well as construction of several sewage treatment plants. Expansion continues beyond the East Zone both within the Philippines and overseas.

Ayala’s automotive dealerships posted revenues of P11.5 billion, up 6% versus prior year. Net income rose by 30% to P299 million. Ayala remains one of the largest vehicle distributors in the country, capturing 50% of Honda network sales and 30% of Isuzu sales nationwide.

Ayala’s overseas businesses continue to be impacted by the lingering effects of the global downturn in Europe and the U.S. Its electronics manufacturing business, Integrated Microelectronics, Inc.’s revenues grew by 4% to US$412 million, driven mainly by the sustained strong performance of its China operations. Net income reached US$4.7 million, a 53% decline versus prior year, partly driven by the global downturn. However, excluding one-off expenses earnings were up by 27%, remaining profitable despite the challenging market environment. Following the acquisition of a 56% stake in PSi Technologies, Inc., IMI continues to look for acquisition opportunities to build on its existing capabilities.

LiveIt, Ayala’s holding company for its business process outsourcing investments , reported a net profit of $4.9 million in 2010, as a revaluation gain realized on one of its companies more than offset an operating net loss of US$15.7 million which was primarily due to Stream and Integreon. LiveIt’s investees recorded a significant improvement in the second half of the year as the improving global economy resulted in higher transaction volumes for their clients. The combined revenues of LiveIt’s companies grew to $473 million in the second half of 2010, up 9% over the first half of the year, and their combined EBITDA grew to $39 million, up 65% over the first half.

Its international real estate investments continue to see strong performance of its Asian portfolio with projects in Macau, Thailand, and India receiving strong market reception. However, its US portfolio remained weak as a result of the credit contraction, persistent high unemployment, and weak consumer spending in the U.S. The Company booked impairment provisions on some of its US investments that contributed to AG Holdings losses during the year.

Ayala maintains a very strong financial condition, ending the year with cash level of P29 billion and net debt-to-equity of 0.12:1. It is eyeing investments in the infrastructure and power sectors. On a group-wide basis, capital expenditures are expected to reach P79 billion this year, 21% higher than capex in 2010, reflecting the group’s optimism on the country’s renewed growth prospects.

The above press statement pertains to the disclosure made today, March 11, 2011, 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 (“AC”) and Ayala Land, Inc. (“ALI”) announced they exchanged their ownership interests in ARCH Capital Management Company Limited (“ARCH Capital”) and ARCH Capital Asian Partners, G.P., (together “ARCH”) with The Rohatyn Group (“TRG”), resulting in TRG acquiring AC’s and ALI’s combined 50% interest in ARCH.

ARCH Capital and ARCH Capital Asian Partners, G.P. are the investment manager and the general partner, respectively, of ARCH Capital Asian Partners, L.P. (“ARCH Capital Fund” or “the Fund”) – an Asian real estate fund with investments in China, Macau, Singapore, Thailand and India. TRG is an emerging markets-focused private investment firm with approximately $3 billion in assets under management. AC, a cornerstone investor in TRG since its founding in 2003, will further increase its investment in TRG as a result of the share exchange to become one of TRG’s largest outside shareholders.

AC and ALI are sponsors of ARCH and co-founded the ARCH investment management firms in 2006 together with Richard Yue. Mr. Yue is retaining his current 50% interest in ARCH and will continue to serve as CEO and CIO of ARCH. The completed exchange of ownership interests will leave the activities, management, focus and shareholder structure of the ARCH Capital Fund unchanged, with AC and ALI retaining their respective ownership stakes in the Fund.

Commenting on the transaction, AC CEO Jaime Augusto Zobel de Ayala said, “We believe this is a natural progression for ARCH which has been a fruitful and exciting investment for us. At this stage in its next growth cycle, we feel it would be better served and managed within a globally dedicated alternative asset management firm. Given Ayala’s successful experience as an investor in TRG for a significant period of time, we believe TRG would be an ideal partner in ensuring ARCH’s continued success. It would also allow us to consolidate our investments in this particular industry grouping.”

The above statement pertains to the disclosure made on March 7, 2011, 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 announced that in a special board meeting held today, the company’s board approved the declaration of a 20% stock dividend to holders of its common shares. In view of this, the company also announced it will increase its authorized capital stock from 596 million common shares to 900 million common shares to accommodate the stock dividend pay-out and will create a new series of preferred shares with the same features as the existing Series A and B. Following requisite approvals from shareholders and the Securities and Exchange Commission, the 20% stock dividend will effectively increase the company’s outstanding common shares to approximately 583 million from the current 485 million, with still ample flexibility to accommodate other issuances in the future. The company also approved new rates for its directors’ compensation which was last updated in 2003, following a survey of practices of other companies.

The company last declared a 20% stock dividend in 2008 and has consistently paid regular cash dividends of P4 per share. The declaration of stock dividends combined with regular cash dividends have effectively increased the recurring dividend payout. Ayala Corporation chairman Jaime Augusto Zobel de Ayala commented, “We believe this is a good way of balancing the need to provide our shareholders steady returns and value as we continue to actively explore new investment opportunities.” Ayala is currently eyeing projects in the power sector and is looking to participate in several infrastructure projects. Ayala’s balance sheet has significant capacity to invest in such projects after reporting cash of close to P30 billion and net debt to equity position of 10% as of September 2010.

The above statement pertains to the disclosure made today, February 22, 2011, to the Securities and Exchange Commission, Philippine Stock Exchange, and Philippine Dealing and Exchange Corporation, by Ayala chief finance officer Delfin Gonzalez, Jr.