Ayala Corporation Reports Mixed Financial Results Amid Rising Costs

Ayala Corporation (AC) has reported a modest 1.4% increase in attributable net income for the second quarter of 2026, reaching ₱10.91 billion (approximately $192 million), up from ₱10.76 billion ($189 million) in the same period last year. This growth, however, was tempered by rising costs, as total revenues rose 8.6% to ₱98.31 billion ($1.73 billion), while expenses increased by 10.2% to ₱75.06 billion ($1.33 billion), according to the company's financial disclosure to the Philippine Stock Exchange.

Revenue from services surged by 17.8% to ₱46.63 billion ($823 million), while sales of goods saw a more modest increase of 3% to ₱40.98 billion ($724 million). Despite these gains, Ayala's share in the net profits of its associates and joint ventures fell by 3.9% to ₱10.70 billion ($189 million), reflecting challenges in its broader investment portfolio.

In terms of expenses, costs associated with rendering services rose significantly by 20.9% to ₱34.70 billion ($610 million), while costs of goods sold increased by 7.5% to ₱29.71 billion ($525 million). General and administrative expenses saw a decline of 9.2% to ₱10.65 billion ($188 million), which somewhat mitigated the overall impact of rising costs. The company reported a consolidated net income of ₱16.10 billion ($283 million), marking a 5.6% increase from ₱15.24 billion ($267 million) year-on-year.

However, Ayala's core net income for the first half of 2026 fell by 7% to ₱22.1 billion ($389 million), primarily due to lower contributions from its subsidiary Ayala Land, Inc. (ALI) and reduced non-operating income. The conglomerate's reported net income also declined by 2% to ₱22.87 billion ($403 million), reflecting the net impact of one-off items during the period. Ayala cited lower dividend income from Manila Water Co. and a reduced stake in Mynt following Mitsubishi Corp.'s entry into AM 50 Ventures, Inc. in 2025 as contributing factors to this decline.

In the banking sector, the Bank of the Philippine Islands (BPI) reported flat net income at ₱32.8 billion ($578 million) for the first half of the year, with strong revenue growth offset by increased operating expenses and provisions. Total revenues surged by 12% to ₱104 billion ($1.84 billion), while loans and deposits both grew by 12% and 9%, respectively. However, provisions for credit losses jumped by 84% to ₱13.3 billion ($235 million), reflecting a more cautious economic outlook.

“A well-diversified portfolio coupled with good traction from initiatives undertaken over the past few years have produced solid results even in a period of geopolitical and macroeconomic challenges.”Cezar P. Consing, President and CEO

In the telecommunications sector, Globe Telecom's normalized net income rose by 10% to ₱11 billion ($194 million), buoyed by record gross service revenues. However, its core net income declined by 2% to ₱10.2 billion ($180 million) due to higher interest expenses. Meanwhile, AC Energy and Infrastructure Corp. (ACEIC) reported a 21% increase in core net income to ₱4.2 billion ($74 million), driven by favorable market conditions and increased generation output.

Ayala Healthcare Holdings, Inc. (AC Health) experienced a 25% increase in revenue to ₱7.5 billion ($132 million), although it reported a net loss of ₱167 million ($2.93 million) as higher manpower and marketing costs impacted earnings. AC Mobility, on the other hand, incurred a core net loss of ₱57 million ($1 million), reversing a profit from the previous year due to increased inventory costs and weaker performances from certain automotive brands.

Despite these challenges, Ayala maintains a strong liquidity position, with consolidated cash reaching ₱75.6 billion ($1.33 billion) at the end of June. Cezar P. Consing, Ayala's President and CEO, emphasized the resilience of the company's diversified portfolio, stating, “A well-diversified portfolio coupled with good traction from initiatives undertaken over the past few years have produced solid results even in a period of geopolitical and macroeconomic challenges.”

As of Thursday, Ayala shares fell by 1.95% to ₱502 ($8.84) amid a broader decline in the Philippine Stock Exchange index, which dropped by 1.23%.