Bulletin 04/16/2010
Real estate giant Ayala Land Inc. (ALI) aiming to double its net income in five years to P9.2 billion from P4.6 billion in 2009 while return on equity target is 15 percent by 2014 from eight percent last year.
Company President Antonino Aquino said: “We simply must improve our asset efficiency,” Aquino said adding that indications from the first quarter of 2010 have been good and “I think we will be able to see quarter on quarter growth... we have seen quarterly earnings have been improving over the last four quarters.”
Aside from the higher earnings target, ALI Chaiman Fernando Zobel de Ayala said the firm is also planning to increase its annual cash dividend initially to 30 percent of prior year net income this year and 50 percent by 2014. Payout was 16 percent last year.
ALI is aiming to sell 9,200 residential units this year and is banking on its expansion into new growth centers such as the 29-hectare North Triangle property in Quezon City and the 7.5-hectare in Subic.
It is also expanding to other cities in Baguio, Cavite, Iloilo, Cagayan de Oro and Davao in addition to established presence in Bataan, Cebu and Bacolod.
ALI is also diversifying into the development and operation of boutique hotels and condotels to take advantage of the booming tourism industry.
Ayala Land Capital and Hotels group head Jose Luis Jalandoni said they intend to launch five boutique hotels this year, noting that there remains a large potential in the tourism industry and ALI intends for this to eventually be a core business.
ALI is planning to put up its boutique hotels around the company's commercial centers in Bonifacio Global City, North Trinoma of Quezon City, Ayala Alabang, Davao and Cagayan de Oro to create synergies.
ALI intends toraise $300 million from the public offering of real estate investment trust (REIT) by the second half of this year.
During the press briefing after the firm’s annual stockholders’ meeting Thursday ALI chief financial officer Jaime Ysmael said proceeds from the REIT issuance combined with borrowings will fund the firm’s P27 billion capital expenditure program for 2009.
Ysmael said ALI has tapped JP Morgan Stanley and BPI Capital to be its financial advisers for the planned REIT issue. They will advise ALI in choosing the ideal asset class and mix for the REIT which has to be significant enough to ensure trading liquidity.
“Based on initial advise we’ve been getting from our financial adviser, validated by our fund manager, a size of about $300 million is appropriate for a company like Ayala Land for IPO size. It is a third of the capitalization of the company,” he said.