COVID-19, Taal eruption cut ALI income by 41% in Q1

Property giant Ayala Land Inc. (ALI) saw a 41-percent year-on-year decline in first quarter net profit to P4.3 billion due to the double whammy arising from the eruption of Taal Volcano and the COVID-19 pandemic that led to the lockdown of Luzon and other key regions starting mid-March.Three-month revenues fell by 28 percent year-on-year to P28.4 billion as earnings from residential and office-for-sale developments, shopping mall leasing and the hospitality businesses all contracted.

“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,” ALI president and chief executive officer Bernard Vincent Dy said in a disclosure to the Philippine Stock Exchange on Monday.Revenues from property development slid by 38 percent year-on-year 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. Residential revenues declined by 39 percent to P13.8 billion while office-for-sale revenues also dropped by 68 percent year-on-year to P962 million for the quarter.

Revenues from the sale of commercial and industrial lots grew by 8 percent year-on-year to P2.5 billion. Sales reservations amounted to 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 starting mid-March. It has also earmarked P600 million to assist no-work, no-pay workers in its ecosystem.Office leasing revenues, meanwhile, increased by 15 percent to P2.5 billion through the sustained operations of business process outsourcing and headquarter office buildings. INQ