Fellow shareholders,
The events of the past year have challenged the corporate momentum we have built over the last decade. However, history has shown Ayala’s resilience across multiple business cycles over the 186 years that we have been in operation. This ability to deal with adversity has been built on our fundamental strengths of adhering to the highest standards of corporate governance, always looking to develop value over the long term, remaining flexible to adjust to changing circumstances, and constantly aligning our business objectives with the broader development needs of the country. These fundamental values have stood us in good stead through the years, defined Ayala as a successful multi-business group, and ensured our continuity and relevance throughout the years.
While the challenges of the past year have resulted in one of the most difficult periods in our corporate history, it is also during trying times that the strength of our diversification initiatives and massive expansion program are put to the test.
Recall that in 2011, the Ayala group set in motion a strategic agenda that led to the expansion of our established franchises in real estate, banking, and telecommunications to capitalize on the strong momentum we saw taking place in the domestic environment. In parallel, we invested in energy generation as a new growth platform from which we would derive future sources of earnings and value creation. These initiatives have cemented our competitive advantage, maintained our relevance in our markets, and established the foundation for long-term growth and value regardless of the prevailing macroeconomic or competitive environment.
In particular, we have seen how the strong performance of our core business pillars–Ayala Land, Bank of the Philippine Islands, Globe Telecom, and AC Energy–sustained Ayala’s trajectory in 2019. Their results cushioned the impact of the setbacks faced by Manila Water in connection with the water supply shortage in the metropolis. Further, these core businesses helped mitigate the slowdown AC Industrials confronted which arose from headwinds in global manufacturing and the domestic automotive industries. I am pleased to report that despite a challenging period, our profitability improved 11 percent to ₱35.3 billion in 2019.
Let me provide a background of the macroeconomic environment we faced during the period to put this yearend review into perspective.