Ayala Corp. targets to hit pre-pandemic results this year despite expectations of a slower growth in the economy.
Cezar Consing, Ayala president, said foremost in the group’s priorities is to bring the company’s core profit back to pre-COVID results this year.
Ayala in 2019 reported a core profit of P31.1 billion.
“In 2022, they’re at approximately 90 percent of pre-COVID levels. This is the year that we will work to getting them back to 100 percent or better of pre-COVID levels,” Consing said.
“The second priority is that with the improved earnings, we see the opportunity to get more dividends from our business units. And for us to turn around and pay more dividends to our own shareholders to the Ayala Corp. shareholders,” Consing added.
Consing said Ayala likewise intends to develop the group’s other businesses to serve as the new leg of growth, away from telecommunications and energy which had been driving the group’s growth in the last decade.
“At the turn of the century, the big engine of growth for us was Globe Telecom. And over the last few years, the big engine of growth for us has been AC energy. If you look at Globe and AC Energy (ACEN) in the market today, these are big, meaningful companies in their segments. In terms of portfolio management, we want to make sure t the more nascent younger growing companies in our portfolio, that each of them have the potential to be the next Globe or the next ACEN,” he said.
Jaime Augusto Zobel de Ayala, Ayala chairman, told shareholders the group remains “guarded” of its outlook for 2023.
“A slower growth is expected for the Philippines this year due to elevated inflation and interest rates. Declining high inflation may persist and will result in high interest rates.
Likewise, for an extended period, the corporates’ appetite for spending may remain dampened,” he said.
“Due to this, though the strength of the US dollar may diminish if the Fed cuts interest rates sooner, the peso may only move sideways as our substantial current account deficit limits potential appreciation,” he added.
Zobel said this is supported by indicators like the slower imports and loan growth, the latter recorded at 10 percent as of February.
Zobel, however, said the group is betting for “some level of growth” for the Philippines given that remittances continue to grow, up 3.5 percent in February, and unemployment at 4.8 percent.
“Tourist arrivals continue to improve as well, reaching 67 percent of pre pandemic levels last February. So looking ahead, the pivotal question is how fast inflation will decelerate to the Bangko Sentral ng Pilipines’ (BSP) target of between 2 and 4 percent. We may begin to see gradual rate cuts in this instance,” he said.
