Property giant Ayala Land Inc. (ALI) plans to bring to the real estate market P100 billion worth of new inventory this year, regaining the kind of expansion appetite last seen prior to the COVID-19 pandemic.
ALI posted a 40-percent growth in net profit last year to P12.2 billion, driven by higher property development and office leasing revenues. This attained 92 percent of the P13.24-billion net income that Bloomberg market consensus expected the firm to deliver for the year.
Compared to prepandemic earnings, ALI’s 2021 bottom line accounted for 37.4 percent of the P33.19-billion net profit posted in 2019.
For the fourth quarter alone, ALI’s net income reached P3.6 billion, 52 percent higher year-on-year and 54 percent higher quarter-on-quarter.
“Our focus in 2021 was to ensure we provided the right environment in our communities for our residents, businesses and institutional locators to adapt and function better while executing our business recovery plans. As the economy moves to full reopening in 2022, we look forward to the acceleration of our business activity backed by our land bank, diversified portfolio and market-leading estate developments,” said Bernard Vincent Dy, ALI president and CEO.
Capital spending hike
In an investors briefing on Tuesday, ALI chief financial officer Augusto Bengzon said the group’s capital spending this year would increase to P90 billion, rising from P64 billion last year.
Residential projects will account for 49 percent of capital outlays this year, followed by estate development which will account for 18 percent. Land acquisition will have a budgeted share of 19 percent. Mall developments will account for 5 percent, while hotel and resorts as well as offices will each have a share of 2 percent.
For the new product launches with an estimated value of P100 billion, the Alveo brand will have the biggest share at 38 percent, followed by Avida and Ayala Land Premier with 25 percent and 24 percent, respectively. In terms of location, South Luzon will have the biggest share at 43 percent, followed by Metro Manila with 33 percent.
“With the full reopening [of the economy], we see or anticipate increased demand from the renewed confidence and, as such, we are planning to launch P100 billion worth of projects,” Dy said.
Last year, ALI rolled out 22 projects valued at P75.3 billion, seven times more than the rollout in 2020 at the peak of local lockdowns.
Rising revenues
In 2021, ALI’s revenues increased by 10 percent to P106.1 billion, as property development revenues grew by 14 percent to P75.9 billion on the back of construction progress and higher project bookings. Most of the revenue buildup commenced in the fourth quarter as it grew by 40 percent to P24.4 billion from the third quarter.
Supported by relaxed quarantine restrictions in the fourth quarter, total revenues sequentially grew by 2 percent to P33.5 billion.
As an indicator of future revenue growth, sales reservations for the year reached P92.2 billion, up by 13 percent from the level in 2020. This was mainly attributed to solid demand for lots in Southern Luzon by Ayala Land Premier and Alveo.
Sales reservations from lot sales alone jumped by 36 percent to P41.5 billion during the year. In the fourth quarter, sales grew by 5-percent year-on-year to P22.1 billion. INQ