Ayala Land posts P2.8B net income; sales reservations up 15% in 1Q21
Sales reservations totaled P28.5 billion in the first quarter, an increase of 15% from P24.7 billion registered in the same period last year as local demand remained robust amid the community quarantines. This was likewise an increase of 35% from the fourth quarter of 2020.
“We continue to work through the difficulties of the pandemic with an eye towards full recovery in the next two to three years. Our residential business registered higher sales in the first quarter versus a year ago with new product launches gaining favorable market acceptance. Our commercial leasing businesses improved quarter-on-quarter but these are not expected to fully recover until mobility restrictions are eased. Looking at our total portfolio, we expect our capital expenditures, product launches and completions to drive our performance this year amidst the ongoing challenges caused by the pandemic,” said ALI President and CEO Bernard Vincent O. Dy.
The company’s property development revenues registered at P16.2 billion, a 6% dip from last year cushioned by higher bookings and construction progress but 37% lower than the fourth quarter of 2020. Approximately 49% of the construction workforce was deployed, supported by Makati Development Corporation’s off-site manufacturing facilities.
Residential revenues were virtually unchanged year-on-year, ending the quarter at P13.6 billion compared to P13.8 billion in the first quarter of 2020. Revenues from the sale of office units increased 85% to P1.8 billion from P962 million as a result of solid bookings from developments such as ALVEO’s Park Triangle at Bonifacio Global City and Ayala Land Premier’s One Vertis Plaza at Vertis North. Revenues from the sale of commercial and industrial lots decelerated by 67% to P818.4 million from P2.5 billion on slower take up at Vermosa and Alviera estates.
Commercial leasing revenues contracted 41% to P5.1 billion as operations of malls, hotels, and resorts remained restricted. Shopping center revenues dropped 58% to P2.0 billion year-on-year on account of limited operations, discounted rental rates to support tenants, and low foot traffic. Sustained BPO and HQ operations drove office leasing revenues to P2.5 billion, a 2% increase from the previous year. Hotels and resorts revenues ended 60% lower to P640 million as hotel occupancy remains low while resorts were closed since the reimposition of the enhanced community quarantine in the end of March. Compared to the fourth quarter of last year, commercial leasing revenues improved by 13%. Shopping center and office revenues grew 16% and 22%, respectively. Meanwhile, revenues from hotels and resorts were 19% lower.
Ayala Land launched six projects in the first quarter with a total value of P17.4 billion. The company has budgeted P100 billion worth of project launches for 2021.
Capital expenditures amounted to P15.3 billion for the period, equivalent to 17% of the P88 billion full year budget. Approximately 59% was spent on residential projects, 12% on commercial projects, 10% for land acquisition, 17% for the development of estates and 2% for other purposes. Financial sustainability efforts kept the balance sheet strong with a net gearing ratio of 0.75:1.
Ayala Land and its subsidiaries continue to prioritize health and safety initiatives in its various projects to promote safe operations while sustaining its growth objectives. It is expanding into other growth industries as it adapts to changes brought about by the global pandemic.
With the rising demand for cold chain solutions, AyalaLand Logistics Holdings Corporation (ALLHC) recently acquired Technofreeze, a cold storage facility located within Laguna Technopark in Biñan, Laguna, rebranded under Alogis Artico. Aside from this, ALLHC expanded its warehouse facility in ALogis Calamba, opening additional 6,000 sq.m. of space. ALLHC today has a total of 213 thousand sq.m. of standard factory buildings and warehouses under the ALogis brand, and five industrial estates in its portfolio, composed of Laguna Technopark, Cavite Technopark, Laguindingan Technopark, Pampanga Technopark and Alviera Industrial Park. Other commercial properties of ALLHC include Tutuban Center in Manila and South Park in Muntinlupa.
AREIT Inc., the country’s first Real Estate Investment Trust, recently secured the approval of its shareholders for the property-for-share swap transaction with Ayala Land. The asset infusion, composed mainly of ALI’s office leasing properties located within its prime estates, will expand AREIT’s leasing portfolio to 549,000 sq,m. and increase its deposited property value to P52 billion upon securing regulatory approvals.