JG Summit

Holding Firms First Semester 2006 (in P'000)
Revenue		Net Profit
1. JG Summit	40,311,453	1. Ayala Corp.	8,404,138
2. Ayala Corp.	35,715,723	2. SMIC	7,149,934
3. SMIC	31,417,649	3. JG Summit	4,071,514
4. AEV	15,063,134	4. Benpres	2,120,000
5. Benpres	8,358,000
*Balabac (six months - Oct.2005+Jan.2006)

Three conglomerates dominate, in terms of revenues and profits, the 39 holding firms in the Graphic list, namely, Ayala Corp., JG Summit of John Gokongwei Jr. and SM Investments Corp. (SMIC) of Henry Sy.

Ayala's consolidated net income for the first half of 2006 surged to P8.4 billion from P4.6 billion in the same period last year. This was driven by higher earnings from subsidiaries and affiliates, gains from share sales and lower financing expense.

Ayala Chairman and CEO Jaime Augusto Zobel de Ayala says "the strong results during the period are reflective of the underlying positive signals in the broader economy, whic has also been mirrored recently in renewed investor interest in the local equities market."

"We encouraged by the relative stability of our economy and the continued strengthening of our government's fiscal position," he adds.

"We are pleased with the continued growth trajectory of the group as strategic initiatives at the subsidiary level gradually come to bear and as we actively pursue avenues for value realization," Ayala President and CEO Fernando Zobel de Ayala remarks. "The performance of our core businesses reflects the continued vibrancy of domestic consumer demand and the group's efforts to create innovative products and services that are more affordable and accessible to a much broader consumer base. We remain optimistic that this growth can be sustained moving forward given the strong financial and market position of our core businesses."

Equity in net earnings from subsidiaries and affiliates increased by 6% to P6.4 billion, but excluding one-time gains recorded last year, normalized growth would be 21% year-on-year. Globe Telecom, Manila Water and BPI posted robust earnings growth during the period. Companies under AC CApital collectively contributed P1.6 billion in equity earnings, 8% lover year-on-year due to dilution gains in the first quarter of 2005. BPI's total assets reached P540 billion, with deposits up 19% to P435 billion.

Ayala's financial position further strengthened with debt at the parent level declining to P38.5 billion from P44.9 billion as of year-end 2005. This resulted in a 9% declined in interest expense during the period. Debt mix also continued to improve as the company consistently shifted its US dollar debt to peso denominated loans. Ayala recently issued P5.8 billion preferred shares, which is the fist ever hybrid issue in the country dnominated in the domestic currency.

JG Summit's consolidated revenues were up by 24% from P32.64 billion in January-June 2005 to P40.31 billion for the same period this year. The substantial growth was driven by the continued improvement in sales and revenues of core businesses - foods and real estate development - plus revenue contribution of the petrochemicals business.

Not all business units, however, registered a rosy picture as service revenues from JG Summit's telecommunications business declined by 6%, whil the textile business decreased by 11%. Nevertheless, net profit surged to P4.07 billion for the first six months of 2006 from P1.3 billion a year ago.

SM Investments Corp. posted consolidated revenues of P31.42 billion for the first six months of 2006 compared with P26.6 billion a year ago. Net income for the six months ended June 30, 2006 amounted to P7.15 billion, up 65% from 4.34 billion.

An extraordinary income of P1.3 billion was realized in the 1st Quarter of 2006, on account of the gain from the sale of Global Depository Receipts in which the underlying securities ar the Banco De Oro Shares, enhanced SMIC's net income. The Golbal Depository Receipts are listed in the London Stock Exchange.

Retail sales remains to be the greater part of revenues, comprising 70% of the total. Retail sales increased by 7.2% to P19.4 billion for the first six months of 2006, primarily due to the contribution of the new SM Department Stores, namely SM San Lazaro and SM Sucat, which were opened in later part of 2005, and SM Sta. Rosa, SM Clark and SM Mall of Asia, which were opened in the first half of 2006.