MANILA, Philippines - LIVEIT Investments Ltd., the business process outsourcing (BPO) arm of conglomerate Ayala Corp., is targeting to achieve full-year profits by 2013 after years of successive losses while expanding its BPO portfolio.
Ayala Managing Director John Eric Francia said in a chance interview that the conglomerate is comfortable with the scale it has achieved through its four investee firms—Integreon, Stream Global Services Inc., Affinity Express and HRMall.
Future earnings are seen to be aided by the privatization of Stream, a leading multinational call center listed on the New York Stock Exchange, Francia said.
LiveIt narrowed losses last year to $18 million from $32 million in 2010 while revenues rose 16 percent to $318 million. Francia said LiveIt could start seeing a “run-rate” by the last quarter of 2012, which would indicate positive earnings the following year.
“BPO is a space we continue to believe in and the underlying businesses are doing better,” Francia said. “Before it was about growing to a larger scale but now that we have gotten into a reasonable scale already, the main focus is to get to profitability.”
Stream announced in a March 23 filing to the US Securities and Exchange Commission that it plans to implement a series of transactions that would see it becoming a private company at $3.25 per share.
Francia said the Ayala Group owns about 26 percent of Stream, but this could rise to almost 30 percent if Stream becomes fully privatized.
“Usually, when you do a privatization, you see an opportunity to improve the performance of the company. There are a lot of distractions when you are a public company,” Francia said, while noting that LiveIt is keeping its options open on Stream moving forward.
“A few years down the road, [the privatization] will give us flexibility whether to hold it for the longer term or if there is a good opportunity to realize value and sell down, then that’s always a possibility,” he said.
Stream narrowed losses last year to $24 million from $53 million in 2010 while revenues increased 6 percent to $847 million.
LiveIt’s investee firms Integreon and HRMall are involved in knowledge process outsourcing and human resources, respectively, while Affinity Express is considered a leader in emerging outsourced graphics and create services.