November 30, 2023


World Business Inquiries

Ayala Corp.’s Q1 profit down 17%

3 min read

Ayala Corp. chair and CEO Jaime Augusto Zobel de Ayala. INQUIRER file photo

Conglomerate Ayala Corp. saw a 17 percent year-on-year drop in first quarter net profit to P6.7 billion as the coronavirus (COVID-19) pandemic gnawed on various businesses, especially the property, banking and industrial businesses.

Excluding the estimated impact of the public health crisis, Ayala’s net income would have been flat from its year-ago level, including the P1 billion in non-recurring divestment gains from the merger of AC Education with iPeople.

“This unprecedented health crisis has resulted in a radical transformation of societies, economies, and businesses, including the Ayala group. At the onset of the crisis, the Ayala group has prioritized the welfare of our workforce and our many stakeholders across our ecosystem. We have likewise continuously done our part in assisting the government, healthcare sector, and economically vulnerable Filipinos who have been most affected by the crisis,” Ayala president and chief operating officer Fernando Zobel de Ayala said in a disclosure to the Philippine Stock Exchange on Wednesday,

“While the outlook for the business environment has fundamentally changed as a result of this crisis, we take comfort in the fact that we have always maintained a strong balance sheet that provides us with flexibility as we navigate the uncertainties,” Zobel added.

It was earlier reported that Ayala’s core businesses Ayala Land and Bank of the Philippine Islands recorded weak results on the impact of government-mandated enhanced community quarantine protocols starting March 16.

AC Industrials also registered a net loss due to the mandated shutdown of its facilities in China alongside disruptions in the global supply chain in manufacturing. This unit, which includes Integrated Micro-Electronics Inc. and AC Motors, incurred a net loss of P564 million owing to the softer performance of the global economy and the Philippine automotive sector in the first quarter of the year. AC Motors recorded a net loss of P204 million, primarily driven by the closure of Honda Car Philippines’ Laguna facility combined with a plunge in the group’s total sales as a result of Taal eruption and the COVID-19 pandemic lockdown.

Other core businesses, Globe Telecom and AC Energy, held steady during the period as telecommunications and power generation continued to operate during the quarantine albeit on skeleton staffing.

“As we anticipate the reopening of business operations, it is imperative that we strike a balance between productivity and the health of our employees. With this in mind, we have put in place a health protocol to ensure the re-entry of our workforce in a safe and productive way. Our AC Health and HR (human resource) teams have developed a protocol for workplace COVID-19 testing to help assess and protect our employees based on their individual risk profiles. We believe this is a critical step as our businesses readjust to this new environment,” Ayala chair and chief executive officer Jaime Augusto Zobel de Ayala noted.

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