Conglomerates Ayala Corp. and JG Summit Holdings Inc. posted declines in profits during the first half of the year on lower income contribution from core businesses affected by the pandemic.
Ayala Corp. said Thursday in a disclosure to the stock exchange first-half net income decreased 79 percent year-on-year to P7.9 billion.
The conglomerate attributed the decline in first-half net income to the combined effect of Bank of the Philippines Inc.’s aggressive loan loss provisions in the second quarter and Ayala Land Inc.'s limited construction activities and mall operations following the quarantine period starting in mid-March.
Net income of Globe Telecom Inc. fell five percent to ₱11.5 billion because of higher depreciation expenses from network investments while that of AC Energy Philippines Inc. dropped to ₱4.5 billion from its year-ago level of ₱23.2 billion, which included gains from the partial divestment of its thermal assets.
Despite the current economic conditions, the Ayala Group has actively tapped the domestic and international capital markets during the crisis.
Ayala Land and sister unit Bank of the Philippine Islands raised $1.2 billion in the first half of the year. The group since then has accessed an additional US$1.8 billion from various capital raising activities, including Ayala Land’s REIT listing, BPI’s CARE bonds, Globe bonds, and Manila Water Company Inc.’s sustainability bonds.
“It is encouraging to see the strength of the Ayala brand translate to its continued ability to attract sizeable capital under the current environment,” Ayala Corp. chairman and chief executive Jaime August Zobel de Ayala said.
JG Summit Holdings Inc., meanwhile, suffered a net loss of P720 million in the first six months of the year from a net profit of P17.4 billion in the same period last year. The holding company of the Gokongwei Group attributed the significant decline to the group’s airline business and petrochemicals businesses, which were heavily affected by the impact of the COVID-19 outbreak.
First-half consolidated revenues declined 26 percent to P116.5 billion.
The conglomerate incurred a net loss of P2.6 billion in the second quarter, a reversal from a net income of P10.9 billion in the same period last year.