The expansion is in line with ALI’s target to chalk up an annual net profit in excess of P10 billion by 2014, equivalent to a return on equity of 15 percent, top officials said.
“We’re moving to a period of record expansion,” ALI chairman Fernando Zobel de Ayala said during the company’s stockholders’ meeting on Wednesday. “This is the period of our most rapid expansion.”
ALI president Antonino Aquino said the P90 billion worth of projects to be launched this year would be supported by a P37-billion capital spending budget. He added that the property business continued to be robust, with the first three months of the year turning out as a “very good” quarter.
“Based on indications to date, the numbers all continue to look very good relative to the demand. We’ve seen that the demand for our products remains very high and this will translate to positive results. Also, interest rates remain favorable, that means they (buyers) can refinance,” Aquino said.
As part of its expansion plans, ALI will double its landbank over the medium term from 4,000 hectares at present. Aquino said the “Nuvali” eco-development in Sta. Rosa, Laguna, for instance should be replicated in areas like Cavite, Pampanga and Rizal.
Of the 67 projects to be launched this year, 50 will be in the residential segment spread out across the five brands and each of the brands will be a mix of both vertical and horizontal developments spread out all over the country, Aquino said. “It’s the best way to be able to diversify.”
About 26,000 residential units will be launched this year, higher than the 20,000 brought to the property market last year. “It will basically reflect the economic pyramid; in terms of number of units, the bulk will consist of Amaia and Bella Vita (the low-cost) brands but obviously, Avida, Alveo and ALP [Ayala Land Premier] will continue to ramp up,” ALI senior vice president Bobby Dy said.
Dy said ALI’s shopping mall group would also bring to the market 200,000 square meters of leasable area while 100,000 sqm of office space would be added to its portfolio this year.
On the shopping mall front, three new retail developments will open this year – the redevelopment of Glorietta 1, Centrio in Cagayan de Oro and Harbor Point in Subic, which all together will add a little over 140,000 sqm in leasable area.
For the hotel business, the 349-room Holiday Inn hotel will open in Glorietta Center this year while three boutique hotels under the brand “Kukun” will be completed in Bonifacio Global City, Cagayan de Oro and Davao.
On ALI’s tourism/resort portfolio, the Pangalucian Island in El Nido will start full operations by October this year.
During Wednesday’s meeting, shareholders also approved a capital restructuring program that will give it leeway to accept more foreign investors as common shareholders.
Shareholders approved the redemption of 13 billion in outstanding non-voting preferred shares and the issuance of the same number of voting preferred shares. This will be done through a stock rights offering, which will give each common shareholder the right to buy one voting preferred share for each share held at a par value of 10 centavos.
This capital restructuring will be to comply with the regulatory requirement on Filipino ownership following the Supreme Court’s recent ruling that non-voting shares do not count as equity when computing for a company’s Filipino ownership level.
“Before the SC ruling, because of non-voting preferred shares, our foreign ownership is down to 20 percent but with the SC ruling, it has gone up to 39 percent. We’re not technically in breach but we’re very close,” said ALI chief finance officer Jaime Ysmael.
The offering of voting preferred shares is targeted by May or June this year, Ysmael added.