Ayala Land’s Q1 profit down 41%

L-R top to bottom: ALI vice-chair Jaime Augusto Zobel de Ayala, chair Fernando Zobel de Ayala, president Bernard Vincent Dy, chief financial officer Augusto Bengzon at the ALI 2020 stockholders meeting via Zoom

Property giant Ayala Land Inc. saw a 41 percent year-on-year drop in first quarter net profit to P4.3 billion, hit by a double whammy arising from the Taal volcanic eruption and the coronavirus (COVID-19) pandemic that led to the lockdown of Luzon.

“The severe impact of the ECQ (enhanced community quarantine) resulting from the COVID-19 crisis and the Taal eruption caused a major decline in our net income. Our development business was particularly hit hard during the quarter as we saw buyers opting to defer purchases during this period. Our leasing assets were also significantly affected in the latter part of the quarter due to the ECQ. Given the continuing market uncertainty, we quickly made adjustments in our plans to ensure the long-term sustainability of the business,” ALI president and chief executive officer Bernard Vincent O. Dy said in a disclosure to the Philippine Stock Exchange on Monday.

Three-month revenues fell by 28 percent year-on-year to P28.4 billion.

Revenues from property development contracted by 38 percent to P17.2 billion, mainly due to lower project bookings and the impact of the Taal volcano eruption in January this year on the sales of its projects in Southern Luzon. This was aggravated further by lower incremental completion as construction activities were interrupted by the ECQ, the disclosure said.

Residential revenues declined by 39 percent to P13.8 billion while office for sale revenues dropped by 68 percent year-on-year to P962 million for the quarter. The earthquakes in Davao in the fourth quarter of 2019 also affected the sales of its projects in the province.

Nevertheless, revenues from the sale of commercial and industrial lots grew by 8 percent year-on-year to P2.5 billion mainly from existing developments such as Arca South, Seagrove, and Laguna Technopark. Sales reservations registered at P24.7 billion, 27 percent lower year-on-year, during the period.

Commercial leasing revenues reached P8.7 billion, down by 5 percent year-on-year. Sustained office leasing mitigated limited mall operations and the closure of resorts during the ECQ.

Shopping center revenues dropped by 9 percent to P4.6 billion while revenues from hotels and resorts ended 17 percent lower to P1.6 billion.

ALI waived about P2.6 billion worth of rent from tenants in its 32 shopping malls nationwide during the ECQ of Luzon and other key cities. It has also earmarked P600 million to assist no-work-no-pay workers in its eco-system.

Office leasing revenues, meanwhile, increased by 15 percent to P2.5 billion through the sustained operations of business process outsourcing and headquarter buildings.