Ayala Corporation reported that its consolidated net income in the first half of the year dropped 35 percent to P4 billion but, excluding gains from asset sales last year, net income rose by 14 percent.

In a disclosure to the Philippine Stock Exchange (PSE) yesterday, equity earnings from key business units posted healthy growth with equity earnings from Globe Telecom and Bank of the Philippine Islands up by 7 percent and 27 percent, respectively, cushioning the 35 percent fall in equity earnings from Ayala Land, Inc. (ALI).

Companies under its AC Capital division also contributed positively as it reversed last year’s loss following a significant improvement in its electronics manufacturing services unit, Integrated Microelectronics, Inc. (IMI), as well as higher earnings from Manila Water Company.

“We are encouraged by the earnings trend across our key business units despite the marked slowdown in the economy,” Ayala Corporation president Fernando Zobel de Ayala said.

He added that, while conditions will remain challenging, “we are much more optimistic given the resilience displayed by each of our businesses during this challenging period. We will continue to see earnings stabilize in the near term and expect growth to accelerate next year.”

While ALI’s core net income in the first half dropped by 16 percent to P1.87 billion, core earnings in the second quarter rose by 6 percent to P964 million, indicative of a more positive trend.

Bank of the Philippine Islands likewise delivered profitable growth with net income in the first semester reaching P5.3 billion, up 38 percent over the previous year.

Globe Telecom posted a 17 percent growth in net earnings to P7.2 billion, with core net earnings up 3 percent over the same period last year.

Business units under AC Capital contributed P77 million in equity earnings in the first half of the year from a loss of P39 million in the same period last year.

This reversal was driven by a significant improvement in the performance of Manila Water and IMI. Manila Water posted a 16 percent growth in net income to P1.46 billion while IMI recorded a significant improvement in its bottomline in the first half of this year compared to the same period last year in the absence of foreign exchange losses which weighed on earnings in 2008.