Ayala Corporation Q2 2025 Earnings: Profit Surges 17% on Strong Banking and Real Estate Growth
- bedandgoinc
- 19 分前
- 読了時間: 4分
August 20,2025
Ayala Corporation, one of the country's oldest and most diversified conglomerates, posted a solid 17% increase in attributable net income for the second quarter of 2025, reaching ₱10.76 billion, compared to ₱9.21 billion in the same period last year. The earnings growth underscores the resilience of Ayala's diversified portfolio, as strength in banking and real estate cushioned the drag from weaker performances in telecommunications and energy.
Despite a slight dip in consolidated revenues, Ayala managed to deliver stronger profitability by keeping costs under control and leveraging growth in its core businesses.
Financial Highlights: A Closer Look
Q2 Attributable Net Income: ₱10.76 billion (+17% year-on-year)
Quarterly Revenue: ₱90.52 billion (-2.3% from ₱92.67 billion in Q2 2024)
Operating Expenses: ₱68.09 billion (-8.3% year-on-year)
First Half 2025 Net Income: ₱23.36 billion (+5% year-on-year)
Core Net Income: ₱23.7 billion (-2% year-on-year, reflecting one-off adjustments)
The results show that while revenue growth has plateaued in certain sectors, Ayala effectively managed its expense base, enabling earnings to expand at a faster rate than top-line growth.
Banking: BPI as Ayala's Steady Growth Engine
Ayala's flagship banking arm, Bank of the Philippine Islands (BPI), continues to be a pillar of growth. For the first half of 2025, BPI reported an 8% increase in net income to ₱33 billion, supported by a 14% jump in revenues to ₱92.6 billion.
This revenue boost came primarily from higher net interest income, reflecting increased lending activity and favorable interest rate conditions. However, BPI's operating expenses grew 12% to ₱42.7 billion, due to higher manpower and technology-related costs. These investments, though adding short-term pressure, are expected to strengthen long-term competitiveness in digital banking and financial services.
The sustained growth of BPI highlights Ayala's continued dominance in the banking sector, where consumer lending, SME financing, and digital banking platforms are all growing strongly.
Real Estate: Ayala Land Drives Premium Market Expansion
Ayala Land, Inc. (ALI) remains another key driver of Ayala's earnings, posting an 8% increase in net income to ₱14.2 billion in the first half. This growth was primarily anchored on property development, commercial leasing, and hospitality ventures.
Although overall revenues slipped 1% to ₱83.1 billion due to temporary disruptions from mall reinvention projects and weaker service revenues, ALI’s premium development strategy remains intact. The company launched five new residential projects valued at ₱40.5 billion during the period, reflecting confidence in high-end demand.
A standout among these was the Ayala Land Premier's Laurean Residences in Makati, launched in June, reinforcing ALI's focus on catering to affluent buyers and investors seeking luxury real estate in prime locations.
Telecommunications: Globe Faces Margin Pressures
Ayala's telecommunications unit, Globe Telecom, Inc., experienced continued headwinds. Net income declined 14% to ₱12.4 billion, largely due to higher depreciation, interest expenses, and non-operating charges.
While Globe posted some gains from equity earnings in affiliates and a dilution gain in fintech subsidiary Mynt, these were not enough to offset the cost pressures. Gross service revenues fell 2% to ₱80.2 billion, reflecting softness across both telco and non-telco segments.
This underperformance underscores the ongoing challenges in the telecom sector, where rising capital expenditures for infrastructure and intensified competition continue to squeeze margins.
Energy: ACEN Hit by Impairments and Weaker Operations
Ayala's renewable energy arm, AC Energy (ACEN), saw its profits collapse in Q2 2025. Net income plunged 88% to ₱763 million, mainly due to a ₱2.7-billion impairment from its wind projects in Vietnam.
Core net income fell 24% to ₱3.5 billion, weighed down by multiple factors:
Weaker solar irradiance in the Philippines and Australia.
Damage to wind farms in Ilocos Norte.
Depressed spot market prices locally.
Higher depreciation from newly commissioned plants.
Parent company AC Energy & Infrastructure Corp. (ACEIC) also reported a 39% drop in core net income to ₱4.1 billion, reflecting both lower contributions from ACEN and weaker performance from thermal plants.
This segment highlights the volatility of the energy business, where renewable assets are highly sensitive to weather patterns and market prices.
Portfolio Businesses: Emerging Bright Spots
Despite weaknesses in telco and energy, Ayala's portfolio businesses provided resilience:
Healthcare (AC Health): Core net loss trimmed to ₱100 million from ₱327 million last year. Stronger performance from healthcare providers offset weaker pharmaceutical results. In August, Singapore’s ABC Impact acquired a 16% stake, providing fresh capital to expand Ayala's hospital, clinic, and pharmacy network.
Automotive (ACMobility): Net income surged to ₱122 million from just ₱24 million last year, benefiting from stronger dividends from Isuzu and equity gains from Honda and BYD.
Technology (Integrated Micro-Electronics, Inc.): Delivered a $7.6-million net income, reversing last year's $8.8-million net loss through operational efficiencies.
Logistics (AC Logistics): Narrowed its net loss to ₱631 million from ₱773 million following the closure of its last-mile delivery business and rationalization of operations.
These businesses, while smaller compared to banking and real estate, demonstrate Ayala's strategic diversification into healthcare, automotive, electronics, and logistics, which are increasingly becoming growth contributors.
Market Performance and Investor Sentiment
Ayala Corporation's strong Q2 showing was well-received by investors. Shares rose 1.69% (₱10) to ₱600 per share following the earnings disclosure. The positive market response reflects confidence that Ayala's diversified portfolio can sustain profitability, even with sector-specific headwinds.
Outlook for 2025
Ayala President and CEO Cezar P. Consing acknowledged the need for improvements in certain segments but emphasized optimism for the full year:
“While our telco and energy businesses have some catching up to do, our full year targets remain achievable. We are also encouraged to see our portfolio businesses showing better numbers.”
Looking ahead, Ayala plans to:
Leverage banking and real estate growth as its key profit anchors.
Strengthen healthcare and automotive ventures with fresh capital and strategic partnerships.
Address challenges in energy and telco by optimizing operations and cost structures.
A Testament to Diversification
Ayala Corporation's Q2 2025 performance demonstrates the strength of its diversified portfolio strategy. With banking and property providing consistent growth, and portfolio businesses like healthcare and automotive gaining traction, the group has shown resilience against sector-specific challenges in telco and energy.
While the energy and telecom units face structural headwinds, Ayala's continued expansion in emerging industries positions it for long-term sustainable growth. Investors can view the results as a reminder of the company's adaptability, strategic partnerships, and focus on balancing stability with innovation.
SOURCE:
Comments