Property giant Ayala Land Inc. posted a net income of P25.3 billion last year, up by 21 percent, on higher earnings from sale of residential, office and industrial space alongside an expansion in its leasing businesses.
This translated to a return on equity of 16.1 percent from 14.9 percent in the previous year, ALI told the Philippine Stock Exchange yesterday.
For the fourth quarter alone, net profit rose by 28 percent to P7.49 billion.
ALI’s profit expanded faster than the 14-percent growth in revenue due to higher margins and strong contribution from various subsidiaries and affiliates such as Fort Bonifacio Development Co., MCT Holdings, and the reversal of some impairment charges in the past.
As such, ALI expects to be on track with its P40-billion net profit goal for 2020.
Revenue grew by 14 percent to P142.3 billion, owing to substantial bookings, completion of property development projects and expanding leasing business.
Revenue from the residential business grew by 23 percent to P84.45 billion while that from the office-for-sale business rose by 14 percent to P10.05 billion last year. Sales of commercial and industrial lots also expanded by 29 percent to P7.04 billion.
ALI reported a resurgence of property sales in 2017, posting a 13-percent growth to P122 billion. In the previous year, growth was slower at 3 percent.
Fourth-quarter property sales grew by 17 percent as ALI accelerated its launches in the last three months of 2017. For the full year, P88.8 billion worth of residential and office condominium developments were brought to the market.
Leasing revenue rose by 10 percent to P31 billion as new malls, offices, and hotels and resorts grew their contributions.
“All major product lines posted strong growth, with property sales coming in at the higher end of our estimates and leasing income increasing in line with our planned asset buildup. We continue to expand our estates and land bank around the country—putting us in a good position to continue to benefit from the strong performance of our economy,” ALI president Bernard Vincent Dy said.
Last year, ALI completed the most number of projects that boosted its leasing capability. It opened five malls in 2017 with a combined gross leasable area (GLA) of 189,000 square meters (sqm), bringing the company’s shopping center GLA to 1.8 million sqm.
Revenue from the shopping mall portfolio hit P17.7 billion, up 10 percent from year-ago level.
ALI also completed six office buildings with total GLA of 185,000 sqm, bringing the company’s total office GLA to 1.02 million sqm in 2017. Revenue from office leasing hit P6.7 billion, up 12 percent from a year ago.
Its hotels and resorts business added six new facilities. Revenue from its tourism-focused business hit P6.6 billion, 12 percent higher from a year ago.
To meet market needs, ALI introduced new leasing formats such as Clock In and The Flats.
Clock In offers serviced offices with fully equipped and furnished spaces for start-up ventures while The Flats offers dormitory-type lodging for office workers.
Clock In has branches at Makati Stock Exchange and BGC Technology Center and is set to open more branches in Makati, BGC, Vertis North and the 30th in Pasig this year.
The Flats is set to open its first branch in Makati in 2018.
ALI spent P91.4 billion in 2017 for its aggressive expansion program and completion of new projects.