August 21, 2022

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Ayala Corp. climbs after Q2 earnings results

INVESTORS snapped up Ayala Corp. shares last week after its second-quarter net profit jumped by double digits.

Data from the Philippine Stock Exchange showed a total of 1.43 million shares worth P1.091 billion were traded from Aug. 15 to 19, making it the ninth most actively traded stock last week.

Shares in Ayala Corp. finished at P770 apiece last Friday, up by 5% week on week from its close of P733 each on Aug. 12. However, the stock has declined by 7.6% since the beginning of the year.

“Overall market sentiments look bullish especially for Ayala Corp. as foreign funds are slowly coming back to our equity market,” said Mercantile Securities Corp. Head Trader Jeff Radley C. See in a Viber message, adding that all Ayala companies are doing well, especially its energy arm.

The holding company posted an attributable net income of P8.46 billion in the second quarter, up by 68.5% from the P5.02 billion recorded in the same period last year.

This resulted in its first-half net income increasing by 56.4% to P16.27 billion, higher than the P10.4 billion in the same six months in 2021.

Its performance in the first half was driven by banking unit Bank of the Philippine Island’s (BPI) higher revenues, reduced provisioning, and a gain from a property sale; its property arm Ayala Land, Inc.’s strong leasing revenues from shopping centers and hotels; and its telco’s higher revenues and partial sale of data centers.

This tempered softer results from AC Energy & Infrastructure Corp., which posted a profit decline of 23% to P2.7 billion in the first half. Its listed renewable energy unit ACEN Corp.’s second-quarter income rose by 25% to P1.78 billion, although first-semester profit was still down by 19% to P2.18 billion.

“Our group’s performance in the first half reflects the momentum of the country’s reopening. This is particularly evident in our cyclical units, Ayala Land and BPI, which significantly rebounded in the second quarter amid revitalized mobility and consumer confidence,” Ayala President and Chief Executive Fernando Zobel de Ayala said in a disclosure.

Salisbury BKT Securities Corp. Equity Sales Trader Juan Paolo R. Dela Cruz attributed the strong performance of Ayala Corp. to the continued easing of COVID-19 curbs as the number of infections lessened.

“Main driver is property arm Ayala Land as COVID-19 curbs continue to ease and rental revenues from malls revert back to pre-pandemic prices,” he said in a Viber message, also citing the projected profit from ACEN for its added capacity and higher demand from consumers.

Since March, Metro Manila and other parts of the country have been placed under Alert Level 1, the most relaxed quarantine restriction.

Meanwhile, Mr. Dela Cruz expressed optimism about ACEN as it aims for a 20-gigawatt renewable capacity by 2030.

Mr. See, however, advised the market investors to be cautious in purchasing the stock as “AC (Ayala Corp.’s stock symbol) is already trading at overbought levels.”

He placed Ayala Corp.’s support levels at P730 and P700 and its resistance levels at P770 and P800.

Mr. Dela Cruz expects a P7-billion net attributable income for the third quarter and a P36-billion profit by yearend.

He pegged the stock’s support and resistance levels at P730 and P780, respectively. — Mariedel Irish U. Catilogo