Property giant Ayala Land Inc. (ALI) boosted its second quarter net profit from a quarter ago as well as from the low base seen year-on-year as resilient residential development and office leasing businesses made up for the slack in the shopping mall and hotel segments during the prolonged pandemic.
ALI’s second quarter net profit came in at P3.3 billion, 16.6 times better than the level in the same quarter last year at the height of pandemic restrictions. This also improved by 18.7 percent from the first quarter net profit of P2.78 billion despite the reimposition of tough lockdown protocols in Metro Manila and adjacent provinces.
For the six-month period, ALI’s net profit rose by 34 percent year-on-year to P6 billion on the back of a 19-percent expansion in revenues to P49 billion.
In the second quarter alone, ALI’s revenues surged by 90 percent year-on-year to P24.3 billion coming from a low base last year.
“The pandemic continues to provide an extremely challenging environment for majority of our business lines. Improvement in our performance in the first half of the year was driven primarily by our property development business, with residential demand showing resilience and construction progress driving revenue recognition. While it may take some time for our economy to fully reopen, particularly with the reimposition of ECQ (enhanced community quarantine) in NCR (National Capital Region), we are proactively launching new projects and ensuring we have adequate inventory to serve market segments that are demonstrating stability,” ALI president and CEO Bernard Vincent Dy said in a disclosure to the Philippine Stock Exchange on Tuesday.
ALI’s property development revenues grew by 37 percent year-on-year to P34.1 billion for the six-month period, driven by construction progress as well as higher sales bookings.
As an indicator of future revenue trajectory, sales reservations in the second quarter summed up to P19.7 billion, 45 percent better than the same period last year.
Local demand remained strong despite the reimposition of ECQ in the metropolis and adjacent provinces from March until April, ALI reported, bringing its first half sales reservations to P48.2 billion, up by 26 percent from last year.
On the other hand, six-month commercial leasing revenues were weighed down by renewed restrictions, with revenues declining by 26 percent year-on-year to P9.5 billion. Shopping center revenues likewise slid by 43 percent year-on-year to P3.4 billion as operations remained limited during this prolonged pandemic while rent discounts were continued to support tenants.
Office leasing revenues amounted to P4.8 billion in the first semester, a very slight improvement from last year as business process outsourcing and headquarter operations cushioned the impact of Philippine offshore gaming operator cancellations.
Revenues from hotels and resorts, meanwhile, declined by 42 percent to P1.2 billion as resort operations were restricted from the end of March until April.
In terms of residential inventory, ALI has budgeted P100 billion worth of residential launches this year. In the first half, it brought to the market 14 new projects with a total sales value of P44.3 billion. Eight of these projects were launched in the second quarter, including Anvaya Cove S3 in Morong, Bataan by Ayala Land Premier and Bayview Heights in Cagayan de Oro, Misamis Oriental by Alveo. INQ