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Ac 2018
Ac 2018
Sale of goods and services expanded 13 percent to ₱274.9 billion of which 3% was a
result of the adoption of PFRS 15 (new accounting standard in 2018 pertaining to
Revenues from Contracts with Customers). Revenue growth was driven by Ayala Land
which posted higher sales across all its business segments, supported by higher
sales from IMI’s Europe, China, Philippines, and Mexico units as well as
contribution of VIA Optronics and Manila Water’s new business units.
Ayala Land sustained its growth momentum during the year with net income expanding
16 percent to ₱29.2 billion, primarily driven by the strong performance of its
property development and commercial leasing businesses.
Property development revenues jumped 18 percent to ₱120.3 billion on strong sales
across its residential, office-for-sale, and commercial lot segments. Residential
revenues jumped 20 percent to ₱101.1 billion, while reservation sales grew 16
percent to ₱141.9 billion, bolstered by strong demand from local and overseas
Filipinos, which accounted for 82 percent of total sales during the year.
Fresh bookings from One Vertis Plaza in Vertis North, Quezon City, The Stiles East
Enterprise Plaza in Circuit Makati, and completion of Park Triangle Corporate Plaza
in Bonifacio Global City lifted the sale of office spaces, with revenues reaching
₱11.4 billion, 14% higher year-on-year. In addition, revenues from the sale of
commercial and industrial lots grew 10 percent to ₱7.7 billion, lifted by sales
from its estates in the Visayas and Mindanao region, Evo City in Cavite, Alviera in
Pampanga, and Cavite Technopark.
Meanwhile, the opening of new malls and office spaces as well as the launch of new
hotel and resort rooms drove the 17 percent expansion in commercial leasing
revenues to ₱34.9 billion from its year- ago level. In 2018, Ayala Land added
142,000 square meters of mall space with the opening of three new malls: the
Circuit Mall in Makati, the Capitol Central Mall in Bacolod, One Bonifacio High
Street in Taguig, bringing its total mall gross leasable area to 1.9 million square
meters. Moreover, the completion of Bacolod Capitol Corporate Center, Vertis North
Corporate Center 3, and Ayala North Exchange pushed up Ayala Land’s total office
GLA to 1.1 million square meters.
Ayala Land’s commercial leasing business was further boosted by its hotels and
resorts portfolio, which continues to benefit from the growth of the country’s
tourism sector. In 2018, it added 390 rooms across its portfolio of branded hotels
and its own Seda brand as well as bed and breakfast rooms in its Lio and Sicogon
eco-tourism estates, bringing the total to 2,973 rooms.
The sustained strong performance of its leasing segment has supported the continued
buildup of Ayala Land’s recurring income business, which increased at a compounded
annual rate of 26 percent since 2013. Meanwhile, its development income, which
comprises residential, office, and lot sales, grew at a compounded annual rate of
18 percent.
Manila Water recorded a net income of ₱6.5 billion, 6 percent higher from the
previous year, largely driven by the Manila Concession, boosted by the contribution
of its newly acquired platforms in Thailand and Indonesia.
The Manila Concession posted steady growth, with a three percent increase in billed
volume to 503 million cubic meters. This was supported by the 28 percent positive
tariff adjustment granted by the Metropolitan Waterworks and Sewerage System to be
implemented on a staggered basis over a five- year period from 2018 to 2022.
Outside the Manila Concession, revenues from Manila Water Philippine Ventures rose
six percent to ₱3.3 billion. Lowered billed volume across its domestic subsidiaries
as well as operational and regulatory challenges, including the closure of Boracay
island, weighed down MWPV’s performance during the year.
Manila Water Asia Pacific’s overseas investments continues to bear fruit. It booked
a 53 percent surge in equity share in net income of associates to ₱699 million.
This was mainly driven by the two platforms it acquired during the year, East Water
in Thailand, and PT Sarana Tirta Ungaran in Indonesia, which contributed ₱262.7
million and ₱1.4 million in equity earnings, respectively.
To support its diversification strategy, Manila Water continues to ramp up its
domestic and international business development initiatives, securing 13 new
businesses in 2018. These include the full concession projects in Calbayog in
Samar, San Jose in Nueva Ecija, and in Iloilo, Isabela, Pangasinan, Batangas,
Bulacan, and Laguna as well as the acquisition of a 19 percent stake in East Water
and a 20 percent stake in PT Sarana Tirta Ungaran.
AC Energy has also entered the Australian renewables market through a joint venture
with international50% ownership in UPC's Australian business. the 1,000 MW Robbins
Island and Jims Plain projects in North West Tasmania and the 700 MW New England
Solar Farm located near Uralla in New South Wales. It also has a further
development portfolio of another 3,000 megawatts located in NSW, Tasmania and
Victoria.
Share of profits of associates and joint ventures grew 11 percent to ₱20.5 billion,
lifted by Globe’s higher data-driven revenues plus the growth in BPI’s core
businesses. The adoption of the new accounting standards PFRS 9 (Financial
Instruments) and PFRS 15 has minimal effect in the net income of BPI and Globe in
2018. Higher equity in net earnings from AC Energy’s investee companies, namely GN
Power Mariveles, SD Geothermal, and Sidrap, as well as contribution of Manila
Water’s new overseas investments also drove the increase. However, this was
partially offset by Ayala Land’s consolidation of MCT, previously reported as an
associate, as well as AC Ventures’ share in net losses of Zalora and Mynt.
Bank of the Philippine Islands reported a net income of ₱23.1 billion, up 3 percent
from the previous year, boosted by the robust growth of its core banking business
but tempered by higher provisions and operational spending.
The bank’s total revenues grew 11 percent to ₱78.5 billion on the back of a 16
percent growth in net interest income, which reached ₱55.8 billion. The increase in
net interest income was a result of a 9 percent improvement in average asset base
and a 21-basis point expansion in net interest margin.
Total loans stood at ₱1.35 trillion, reflecting a 13 percent growth year-on-year,
boosted by strong performance of its corporate loans and credit card loans, which
increased 13 percent and 24 percent, respectively. Total deposits reached ₱1.59
trillion, up 1.5 percent, with current and savings accounts registering faster
growth at 2.4 percent. The bank’s current account and savings account ratio stood
at 71.9 percent while the loan-to-deposit ratio was at 85.4 percent.
The bank recorded higher fee income from its transaction-based service charges,
credit card, and rental businesses. However, lower trust, investment management,
and corporate finance fees, and securities trading income during the year, tempered
BPI’s non-interest income, which slid 1 percent to ₱22.7 billion.
Operating expenses totaled ₱43.6 billion for 2018, an increase of 13.2 percent
year-on-year on accelerated spending to support the bank’s digitalization strategy
and investments in its microfinance network. In 2018, BPI Direct Banko, its
microfinance arm, doubled its branch network to 200. These initiatives resulted in
cost-to-income ratio of 55.5 percent in 2018 from 54.3 percent a year ago.
At the end of 2018, the bank’s total assets stood at ₱2.1 trillion, up 9.5 percent
from the previous year, with return on assets at 1.2 percent. With the success of
its capital raising exercises - the ₱50 billion stock rights offering, the US$600
million in senior unsecured bonds, and the ₱25 billion in peso fixed rate bonds -
BPI’s total capital reached ₱248.52 billion, up by 38 percent from its year-ago
level. Capital adequacy ratio was at 16.09 percent and Common equity tier 1 ratio
was at 15.19 percent.
Data-driven demand across its business segments bolstered Globe’s net profits,
which reached ₱18.6 billion during the year.
On a post-PFRS basis, service revenues reached ₱132.9 billion. Mobile revenues grew
nine percent to ₱106.9 billion driven by mobile data services, which accounted for
51 percent of the segment from 44 percent a year ago. This was supported by the
sustained higher prepaid top-ups, indicating greater consumer spending on mobile
data. This in turn, drove the mobile data traffic growth to 956 petabytes from 600
petabytes a year ago.
Globe’s home broadband business jumped 19 percent to ₱18.5 billion on continued
subscriber expansion in fixed wireless solutions, specifically the Home Prepaid Wi-
Fi product. Similarly, its corporate data business expanded 15 percent to ₱11.8
billion amid increasing demand for fast, reliable, and secure internet connectivity
and modern business solutions.
With a consistent strong revenue and well managed costs throughout the year,
Globe’s EBITDA improved 22 percent to ₱64.9 billion, with EBITDA margin at 46
percent from its year-ago level of 42 percent.
Globe continues to build its network capacities to address the increasing data
traffic growth and customer base as it ramped up its LTE rollout. It spent ₱43.3
billion in capital expenditures in 2018, equivalent to 32 percent of its service
revenues.
At the end of 2018, Ayala’s total assets stood at ₱1.2 trillion. Investments in
associates and joint ventures expanded 19 percent to ₱240.1 billion owing to Ayala
parent’s subscription to BPI’s stock rights offering as well as new investments of
Manila Water in East Water in Thailand and PT Sarana in Indonesia, and AC Energy in
renewable platforms in Australia and Vietnam. Furthermore, the growth was lifted by
additional investments of AC Infrastructure in the LRT 1 project and higher share
of net earnings in BPI and Globe and investee companies of Ayala Land, Manila
Water, and AC Energy. This was partly offset by Ayala Land’s consolidation of MCT,
which was previously reported as associate as well AC Ventures‘ equity losses in
Zalora and Mynt.
Investments in properties jumped 12 percent to ₱227.6 billion driven by Ayala
Land’s expansion projects in its malls, office properties, land development
initiatives, and the impact of the consolidation of MCT. An adjustment in land
classification required under the PFRS 15 likewise contributed to the increase.
At the end of the year, total debt at the consolidated level stood at ₱412 billion,
18 percent higher from the end-2017 level. This was driven by higher borrowings of
the parent as well as higher loan balances of Ayala Land, Manila Water, and AC
Energy.
Ayala’s balance sheet remained healthy with enough capacity to undertake
investments and cover its dividend and debt obligations. As of end-2018, parent
level cash stood at ₱8.5 billion, while net debt stood at ₱96 billion. Loan-to-
value ratio, the ratio of its parent net debt to the total value of its assets,
stood at 11 percent.
The conglomerate’s peso-dollar debt split ended at 64:36 for 2018. Ayala’s dollar
denominated debts are fully covered by foreign currency assets.
For the year 2018, a total of P=217.4 billion was spent at the group level in
support of the parent’s own investment program as well as the expansion initiatives
of its real estate, telecom, water, and energy units, and the ramp-up of its
industrial technologies, education, infrastructure, and healthcare businesses.
Ayala parent has set aside P=51.8 billion in capital spending for the year. In
2018, 84% or P=43.7 billion of this budget has been deployed largely to support the
stock rights offering of BPI and IMI as well as to fund the expansion of our
emerging businesses: AC Energy, AC Industrials, AC Infra, AC Health and AC
Education.
MWC ended 2018 with total capital expenditures of P=10.0 billion, 23% lower than
the previous year.
The Manila Concession spent a total of P=8.0 billion (inclusive of concession fee
payments) for capital expenditures in 2018. Of the total amount, 93% was spent on
wastewater expansion, network reliability, and water supply projects, while the
balance of 7% was accounted for by concession fees paid to MWSS.
Meanwhile, total capital expenditures of the domestic subsidiaries dropped by 20%
to P=1.9 billion from the P=2.3 billion spent in 2017. Of the total amount, P=561
million was spent by Laguna Water for its water network expansion, while Boracay
Water and Tagum Water disbursed P=444 million and P=203 million, respectively.
Estate Water spent P=490 million for its greenfield and brownfield projects, with
the balance being taken on by the remaining subsidiaries for its various projects.
In 2018, IMI spent $65 million on capital expenditures to build more complex
manufacturing capabilities which were funded by proceeds from the stock rights
offering. For 2019, IMI expects additional $68 million of capital expenditures
intended to expand IMI’s capacity and support expected increases in demand, as well
as to sustain IMI’s productivity and efficiency.
For the year 2018, ACEI’s budget for capital expenditures amounts to P=20.1 billion
of which P=9.8 billion has been disbursed as of the twelve-month period mainly for
investments in GNPD and GNPK and in foreign countries mainly Vietnam and Australia.
For the whole year 2018, total capital expenditures amounted to P=3.5 billion.
The December 31, 2018 and December 31, 2017 consolidated financial statements show
several significant increases in Balance Sheet and Income Statement accounts
relating to two (2) key factors:
1. Major acquisitions made by subsidiaries as follows:In year 2018
a. Ayala Land, Inc.’s (ALI’s) increase of ownership share in MCT Berhard (MCT) from
33% in December 2017 to 72.31% in February 2018.
In year 2017
b. AC Energy, Inc.’s (ACEI’s) acquisition of 100% ownership of Visayas Renewable
Corp. (VRC)
(formerly Bronzeoak Clean Energy), AC Energy Development, Inc. (AEDI) (formerly AC
Energy Devco, Inc.), and 66% in Manapla Sun Power Development Corp. (MSPDC) in
March 2017; 100% ownership in SCC Bulk Water Supply, Inc. (SCC) and Solienda, Inc.
(Solienda) in December 2017.
c. Integrated Micro-Electronic’s (IMI’s) acquisition of 80% stake in Surface
Technology International Enterprises Limited (STI) in April 2017.
d. AC Industrial Technology Holdings, Inc.’s (AITHI’s/ACI’s) acquisition through AC
Industrials (Singapore) Ptd. Ltd. of 94.9% ownership of MT Technologies Gmbh (MT)
in July 2017.
2. Adoption of three major accounting standards – PFRS 9 (Financial Instruments)
and 15 (Revenue from Contracts with Customers) and PIC Q&A (Advances to Contractors
and Land Classification) give rise to new accounts in the balance sheet plus
certain reclassifications within the balance sheet (contract assets and contract
liabilities). The summarized impact of these new standards in the balance sheet are
shown below. The impact to income statement is shown in the discussion of income
statement variances.
Cash and cash equivalents – 6% decrease from P=64,259 million to P=60,624 million
Slight decline due to group’s advances for/acquisition of Merlin Solar and ACEI’s
investments; AITHI/ACI’s lower sales; Bestfull Holdings, Ltd.’s (BHL’s) additional
FVPL investments; AC’s new loans were used to fund Bank of the Philippine Islands
(BPI) stock rights offer (SRO) and additional capital infusion in existing
subsidiaries. Sources of cash during the year: ACEI’s dividends from investment and
loan drawdowns; ALI’s loan proceeds and consolidation of MCT; IMI’s proceeds from
SRO; and Manila Water Company, Inc.’s (MWC’s) revenue collections and loan proceeds
were used to fund new investments in Thailand by MWC and project expansions by ALI
and ACEI. This account is at 5% and 6% of the total assets as of December 31, 2018
and 2017, respectively.
Short-term investments – 10% increase from P=5,400 million to P=5,956 million
Increase due to AYC’s short-term placements partly offset by ALI’s placements
maturity. This account is at less than 1% of the total assets as of December 31,
2018 and 2017.
Accounts and notes receivable (current) – 44% increase from P=124,109 million to
P=178,256 million Increase resulting from ALI’s higher sales and impact of
consolidation of MCT; higher sales of IMI; and ACEI’s retail electricity supply
(RES) business and advances for projects; partly offset by ALI’s sale of trade
accounts to banks; and AITHI/ACI’s decline due to lower sales. This account is at
15% and 12% of the total assets as of December 31, 2018 and 2017, respectively.
Inventories – 24% increase from P=76,545 million to P=94,878 million
Increase pertains to AITHI/ACI’s increase in inventories resulting from lower sales
in 2018. This account is at 8% and 7% of the total assets as of December 31, 2018
and 2017.
Other current assets – 13% increase from P=45,325 million to P=51,361 million
Increase pertains to: ALI’s consolidation of MCT; higher creditable withholding
tax, input tax, prepayments in ALI, IMI, AITHI/ACI’s and MWC’s; BHL’s additional
infusion in certain FVPL investments and impact of forex translation; partly offset
by ACEI’s reclassification of deferred input taxes to noncurrent assets. The
account also included those assets held for sale such as: (1) AC Education, Inc.
(AEI) (after consolidation of National Teachers College (NTC)) and (2) ACEI’s net
investment in GMCP and GN Power Dinginin Ltd. Co. (GNPD). This account is at 4% of
the total assets as of December 31, 2018 and 2017.
Accounts and notes receivable (non-current) – 8% decrease from P=45,774 million to
P=42,037 million Account decrease due to ALI’s sale of trade receivables partly
offset by ACEI’s receivable from UPC Renewables. This account is at less than 4% of
the total assets as of December 31, 2018 and 2017.
Investments in associates & joint ventures – 18% increase from P=202,649 million to
P=238,535 million
Increase attributable to AC’s subscription to BPI’s SRO; new investments of MWC
(East Water – Thailand and PT Sarana - Indonesia) and ACEI (UPC Renewables
Australia and solar unit in Vietnam) and additional infusion of AC Infrastructure
Holdings, Inc. (AC Infra) for Light Rail Manila Holdings, Inc. (LRMHI); plus equity
in net earnings (less dividends) from BPI, Globe, and from existing investees of
ALI, MWC and ACEI groups. These were partly offset by ALI’s step-up acquisition of
MCT as discussed in item 1 above; ACEI’s reclassification of part of its coal
investments to assets held for sale and AC Ventures Holding Corp.’s (AVHC’s) share
in equity losses in Zalora and Mynt. This account is at 20% of the total assets as
of December 31, 2018 and 2017.
Investment Properties – 11% increase from P=231,527 million to P=256,299 million
The increase relates to ALI group’s expansion projects mainly on malls and office
buildings plus impact of MCT consolidation. This account is at 21% and 23% of the
total assets as of December 31, 2018 and 2017, respectively.
Property, plant and equipment – 22% increase from P=85,431 million to P=104,492
million
Increase coming from ACEI’s construction of power plants for GN Power Kauswagan
Ltd. Co.'s (GNPK’s) coal unit plus impact of forex translation adjustment; ALI’s
consolidation of MCT; IMI’s and MWC’s expansion projects. This account is at 9% and
8% of the total assets as of December 31, 2018 and 2017, respectively.
Service concession assets – 8% increase from P=91,050 million to P=98,404 million
Increase attributable to MWC’s additional service concession assets. This account
is at 8% and 9% of the total assets as of December 31, 2018 and 2017, respectively.
Deferred tax assets-net - 22% increase from P=12,721 million to P=15,546 million
Increase related to additional deferred tax assets of ALI’s leasing group. This
account is at 1% of the total assets as of December 31, 2018 and 2017.
Other noncurrent assets - 65% increase from P=20,054 million to P=33,010 million
Increase pertains to: ALI’s higher project advances, deferred tax and non-current
prepaid expenses; MWC’s higher FCDA; ACEI’s reclassification of deferred input tax
and project development cost from other current assets; AYC Finance Ltd.’s (AYC’s)
hold-out cash for a loan availed by AC; and BHL’s additional FVOCI investments. The
account also includes the Group’s pension asset amounting to P=82 million.1 This
account is at 3% and 2% of the total assets as of December 31, 2018 and 2017,
respectively.
Short-term debt – 32% increase from P=29,905 million to P=39,518 million
Increase in loans due to additional borrowings of MWC and ACEI partly offset by
ALI’s net payments and AITHI/ACI’s lower borrowing due to lower vehicle purchases.
This account is at 5% of the total liabilities as of December 31, 2018 and 2017.
Accounts payable and accrued expenses – 21% increase from P=169,653 million to
P=204,759 million
Increase mainly coming from ALI’s trade payables, accrued project and manpower
costs; IMI’s increase in sales volume driving the vendors payable; and MWC’s
increase arising from acceleration of projects and accrual of expenses. These were
partly offset by AITHI/ACI’s and ACEI’s lower trade payables. This account is at
28% of the total liabilities as of December 31, 2018 and 2017.
Income tax payable – 99% increase from P=1,710 million to P=3,407 million
Increase mainly arising from higher tax payable of ALI group. This account is less
than 1% of the total liabilities as of December 31, 2017 and 2016.
Other current liabilities – 60% increase from P=25,984 million to P=41,652 million
Excluding the PFRS reclassification, account increase due to ALI’s higher customer
deposits. This account is at 6% and 4% of the total liabilities as of December 31,
2018 and 2017, respectively.
Long-term debt (current) – 253% increase from P=13,732 million to P=48,481 million
Increase in loans due to ALI’s additional borrowings for expansion projects and
effect of consolidation of MCT; AYC’s reclassification of noncurrent long-term debt
to current portion and impact of forex translation on outstanding USD debt; and
IMI’s increase for working capital requirements. These were partly offset by AC’s
payment of maturing loans. This account is at 7% and 2% of the total liabilities as
of December 31, 2018 and 2017, respectively.
Long-term debt (noncurrent) – 6% increase from P=306,975 million to P=324,263
million
Increase in loans due to additional borrowings of AC to fund subscription to BPI
and IMI SRO and infusions to subsidiaries; ACEI’s additional drawdowns for GNPK
project and new investments, including impact of forex translation; and MWC’s new
debt to fund various capital expenditures and projects. These were partly offset by
IMI’s and ALI’s debt payments and AYC’s reclassification of noncurrent long-term
debt to current portion. This account is at 44% and 50% of the total liabilities as
of December 31, 2018 and 2017, respectively.
Service concession obligation (total) – 8% decrease from P=8,552 million to P=7,839
million
Decrease was due to periodic payments made by MWC as well as to the
reclassification of noncurrent to current account. This account is at 1% of the
total liabilities as of December 31, 2018 and 2017.
Deferred tax liabilities – 36% increase from P=8,108 million to P=10,999 million
Increase attributable to increase in deferred tax liabilities of ALI. This account
is at 2% and 1% of the total liabilities as of December 31, 2018 and 2017,
respectively.
Other noncurrent liabilities – 4% increase from P=45,835 million to P=47,849
million
Increase primarily due to ALI’s higher customer deposits and MWC’s higher
retentions payable and customer guaranty deposits. This account is at 6% and 7% of
the total liabilities as of December 31, 2018 and 2017.
Paid-in capital – 11% increase from P=75,001 million to P=83,362 million
Increase attributable to the issuance of common shares to a single long-term
institutional investor (see Note 21 of the Notes to Consolidated Financial
Statements). This account is at 18% of the total equity as of December 31, 2018 and
2017.
Fair value reserve of financial assets at fair value through other comprehensive
income (FVOCI) – 63% decrease from negative P=1,108 million to negative P1,806
million
Decrease attributable to decline in market value of securities held by BPI group.
This account is at less than 1% of the total equity as of December 31, 2018 and
2017.
Cumulative translation adjustments - 18% decrease from P=2,794 million to P=2,304
million
Decrease due to higher foreign liabilities of ACEI, AC International Finance Ltd.
(ACIFL) and AYC; partly offset by upward impact of higher net asset of BHL, MWC and
investment in Globe. Forex of PhP= vs US$ amounted to P=52.58 in December 2018 vs.
P=49.93 in December 2017. This account is at 1% of the total equity as of December
31, 2018 and 2017.
Equity Reserve - 6% decrease from P=11,600 million to P=10,872 million
Decrease related to ALI’s equity transactions for additional investment in Prime
Orion Philippines, Inc, (POPI) and consolidation of MCT; plus impact of AEI’s
acquisition of remaining minority interest in NTC. This account is at 2% and 3% of
the total equity as of December 31, 2018 and 2017, respectively.
Retained earnings – 15% increase from P=170,302 million to P=196,381 million
Increase represents share in group net income net of dividends declared. This
account is at 42% and 41% of the total equity as of December 31, 2018 and 2017,
respectively.
Non-controlling interests – 15% increase from P=154,745 million to P=178,347
million
Higher amount represents share in group net income and other comprehensive income
net of dividends declared by subsidiaries to its non-controlling interests; plus
impact of ALI’s consolidation of MCT. This account is at 38% of the total equity as
of December 31, 2018 and 2017.
In 2017, the Group changed the presentation of its consolidated statement of income
from the single step to the multiple step presentation. This presentation better
reflects and distinguishes other income from revenue and other charges from the
operating expenses of the Group. Prior years consolidated statements of income have
been re-presented for comparative purposes. The change in presentation has no
impact on the consolidated net income, equity, cash flows and earnings per share of
the Group.
For 2018, the Group classified certain revenues from goods and rendering services
to contract revenues, in compliance with provisions of PFRS 15 (see Note 2 of Notes
to Consolidated Financial Statements) summarized as follows. Prior years
consolidated statements of income have been re- presented for comparative purposes:
Sale of goods and rendering services – 13% increase from P=242,228 million to
P=274,881 million
Increase in overall sale of goods and rendering services due to ALI’s higher sales
coming from all segments; IMI from its Europe, China, Philippines and Mexico units
plus contribution of Via; MWC’s and ACEI’s service revenues arising from
consolidation of new subsidiary and its RES unit. As a percentage to total revenue,
this account is at 91% in December 31, 2018 and 2017.
Share of profit of associates and joint ventures – 11% increase from P=18,494
million to P=20,460 million, of which P=83.7 million or 4% was due to PFRS
reclassification as discussed in item 2 above
Increase coming from Globe’s higher revenues; ACEI’s share in net earnings of GNPD,
Salak-Darajat and UPC Sidrap; MWC’s stable earnings from foreign investments; and
BPI’s increase in NIAT coming from net interest income. These were partly offset by
decline in ALI due to consolidation of MCT (previously reported as an associate)
and AVHC’s share in net losses of Zalora and Mynt. As a percentage to total
revenue, this account is at 7% in December 31, 2018 and 2017.
Interest income from real estate – 30% increase from P=5,410 million to P=7,042
million
Increase attributable to interest income from ALI group. This account is at 2% of
the total revenue in December 31, 2018 and 2017.
Dividend income – 84% decrease from P=654 million to P=107 million
Decrease in dividend income arising lower dividend income of AITHI/ACI and partly
due to reclassification of accounts by ACEI. This account is at less than 1% of the
total revenue in December 31, 2018 and 2017.
Cost of sales and rendering services – 12% increase from P=175,674 million to
P=196,608 million
Increase in the overall cost of sales and rendering services is aligned with the
growth in revenues. As a percentage to total costs and expenses, this account is at
87% in December 31, 2018 and 2017.
General and administrative expenses (GAE) – 18% increase from P=25,213 million to
P=29,822 million of which P2,283 million or 50% of the increase represent impact of
consolidation of new subsidiaries Increase mainly on combined increments in the
group’s expenses specifically from: ALI (taxes, contracted services and
depreciation plus impact of consolidation of MCT), MWCI (management fees,manpower-
related, selling expenses, provision for doubtful accounts and taxes), AITHI/ACI
(mainly impact of consolidation of MT and Merlin), IMI (restructuring costs of
Shenzen plant, consolidation of VIA and STI and partial impairment of certain
goodwill asset), and AC (higher business development, sustainability and manpower
costs. Without the effect of newly consolidated subsidiaries, GAE increased by
P2,326 million or 9% year on year. As a percentage to total costs and expenses,
this account is at 13% in December 31, 2018 and 2017.
Interest income – 93% increase from P=1,404 million to P=2,706 million
Increase mainly coming from interest income from ACEI group.
Interest and other financing charges – 32% increase from P=14,441 million to
P=19,101 million
Increase due to higher interest expenses of ALI, AC/AYC, IMI, MWC and ACEI as a
result of higher debt balance level this year as compared to last year.
Other charges – 17% decrease from P=11,672 million to P=9,662 million
Decrease due to MWC’s lower rehabilitation works of service concession assets.
Provision for income tax (current and deferred) – 23% increase from P=12,260
million to P=15,120 million
Increase primarily due to higher taxable income attributable mainly to ALI’s on
account of better sales/revenues and better operating results plus ACEI’s deferred
income tax for GNPK investment.
Income attributable to Owners of the parent – 5% increase from P=30,264 million to
P=31,818 million
Increase resulting from better operating results of most subsidiaries of the Group.
Income attributable to Non-controlling interests – 19% increase from P=19,603
million to P=23,247 million
Increase resulting from better operating results of most subsidiaries of the Group.