Ayala Corp., the country's oldest conglomerate, reported Monday its profits last year fell by half due to the absence of extraordinary gains and lower earnings from units.
In a statement, the company said its equity earnings from operating subsidiaries dropped to P7.8 billion while capital gains from share sales declined by 63 percent. These resulted in a 50 percent drop in net income to P8.1 billion.
"The uncertainties spawned by the global financial crisis as well as some non-recurring items weighed on earnings," it noted.
Ayala Corp., with a market capitalization of P103 billion, owns property giant Ayala Land Inc., mobile phone operator Globe Telecom, the Bank of the Philippine Islands (BPI) and utility Manila Water.
Ayala Land posted record earnings of P4.8 billion last year, up 10 percent from the prior year, owing to sustained demand for its middle and affordable residential projects under Alveo and Avida.
BPI, on the other hand, saw its earnings fall 36 percent to P6.4 billion because of weak securities trading gains and insurance business.
Slow consumer appetite pulled down Globe's net income by 15 percent to P11.3 billion while earnings contribution from Ayala Corp.'s portfolio of companies under AC Capital declined due to losses incurred by its electronics and BPO units.
Manila Water, meanwhile, registered a net income of P2.8 billion on the back of higher water sales volume and improvements in the company's operating efficiency.
The water distributor, which operates the East Zone concession, spent P4.2 billion for expansion projects last year that added 46,765 new household connections to its customer base. It was also able to reduce the level of its non-revenue water to 19.6 percent from the 1997 level of 63 percent.
As of end-2008, Ayala Corp. said it was able to raise P25 billion in cash, making it well-positioned for potential acquisitions amid currently deflating asset prices.
"While the operating environment is and will continue to be challenging, these distressed conditions also present opportunities. We continue to explore these and have ensured sufficient liquidity across the group to pursue any compelling opportunity on top of our committed growth targets in the short to medium term," said Ayala Corp. president and chief operating officer, Fernando Zobel de Ayala.
Zobel acknowledged that the global crisis would further termper domestic consumption and inevitably impact demand for some of the group's products and services.
However, he said, they remain optimistic that "we can manage through the challenges given the solid business models of each of our operating units, their strong fundamentals and balance sheets and dominant market positions."