Region: PH

This Philippine corporate earnings season was defined by a stark divergence: trade-linked and financial sectors powered ahead, while domestic cyclicals and sprawling conglomerates struggled to keep pace. The median revenue growth leader—ports & logistics at +28.9%—more than doubled the runner-up, banks at +11.0%, while real estate and conglomerates limped in at +1.9% and +1.4% respectively. The real surprise, however, came from within the laggards, where one conglomerate delivered explosive profit growth that defied its sector's malaise.

Revenue growth by industry (median YoY)

Ports and banks set the pace with double-digit revenue growth

International Container Terminal Services (ICT) was the undisputed star: revenue surged +28.9% year over year, EBITDA rose +26.2%, and net profit climbed +20.6%. The port operator’s momentum validates the trade-recovery narrative, though its P/E of 27.3x and EV/EBITDA of 17.3x leave little margin for error. Among banks, Security Bank (SECB) posted the strongest revenue growth at +27.6%, while BPI (+13.7%) and BDO (+11.0%) also delivered solid top-line expansion. Yet profit growth was far more muted—SECB’s net profit actually fell -4.1%—highlighting margin pressure across the sector. The outlier was Union Bank (UBP), whose net profit exploded +167.4% on a +75.4% EBITDA surge, albeit from a low base.

Real estate and conglomerates struggle with anaemic growth and profit declines

The real estate sector was the weakest link: median revenue growth of just +1.9% masked deep losses at Ayala Land (ALI), where revenue fell -13.9%, EBITDA dropped -15.8%, and net profit plunged -20.2%. SM Prime (SMPH) barely grew revenue (+0.9%) and saw EBITDA shrink -9.8%, though net profit was flat. Among conglomerates, the picture was equally grim: AGI suffered a -18.8% revenue collapse and a -28.7% net profit slide, while AC managed only +0.9% revenue growth with net profit down -4.2%. DMC was slightly better with revenue -2.4%, but net profit still fell -6.8%.

AEV’s profit explosion is the quarter’s biggest surprise

The most striking outlier came from a conglomerate many had written off. AEV delivered revenue growth of +26.4%, EBITDA expansion of +33.7%, and a stunning +83.4% jump in net profit—all while its sector peers were stagnating or declining. This performance was a sharp acceleration from the prior period, where comparable figures were not disclosed, but the sheer magnitude dwarfs every other conglomerate. At a P/E of just 5.0x and EV/EBITDA of 8.1x, AEV offers a rare combination of explosive growth and deep value—a genuine plot twist in a sector defined by lethargy.

Value abounds in banks and conglomerates, but ICT looks priced for perfection

For value hunters, the standout is AGI at a P/E of just 2.6x and EV/EBITDA of 5.8x—though the -18.8% revenue decline explains the discount. More compelling is AEV: growing revenue +26.4% and net profit +83.4% while trading at 5.0x earnings is deeply cheap. Among banks, SECB’s P/E of 4.2x looks attractive despite the profit dip, while BDO at 7.5x and BPI at 8.1x are reasonable for steady growers. At the other extreme, ICT’s P/E of 27.3x and EV/EBITDA of 17.3x price in flawless execution—any stumble in trade volumes could trigger a sharp re-rating. MER, at 12.8x earnings with only +2.0% net profit growth, also looks fully valued.

Dividend yields remain modest; banks offer the best income play

Dividend data was limited, but among available names, banks stand out. BDO and BPI, with their steady net profit growth of +2.1% and +1.8% respectively, are likely to sustain or modestly increase payouts. SECB’s low P/E of 4.2x hints at a potential yield above the sector average, though no explicit yield was given. For income-focused investors, the banking sector offers the most reliable combination of growth and return of capital, while conglomerates like SM and AEV—with P/E multiples under 6x—could unlock value through higher dividends if cash flows remain robust.

Looking ahead, the key watchpoint is whether AEV’s explosive profit growth can be sustained—if it is, the stock’s 5.0x P/E will look absurdly cheap. Conversely, ICT’s premium valuation leaves it vulnerable to any slowdown in global trade. The real estate sector, especially ALI with its -13.9% revenue decline, needs a catalyst to reverse course. With a new quarter underway, the divergence between winners and losers is likely to widen further, making stock selection—not sector bets—the decisive factor for returns.

Players: growth & yield (no absolute levels)