MANILA, Philippines - Property giant Ayala Land Inc. (ALI) opened the year on a strong note as its net earnings rose 36 percent in the first quarter on the back of robust property sales and improved leasing income.
In a financial report submitted to the Philippine Stock Exchange, ALI said consolidated net profit reached P1.62 billion during the period as against P1.2 billion a year ago. Revenues rose 15 percent to P10.6 billion.
Sales take-up reached P10.1 billion, equivalent to an average monthly sales take-up of P3.4 billion. This was 22 percent higher than the year-ago figure of P2.8 billion. Sales to overseas Filipinos likewise increased 21 percent to P1.4 billion due to strong demand for its Alveo and Avida projects in markets such as the US and Asia-Pacific.
Revenues from operations, which include property development, commercial leasing, hotels and resorts, and construction and property management services, went up 14 percent to P10 billion.Through tight control of project and operating costs, gross profit margins for residential unit and commercial lot sales as well as EBITDA (earnings before interest taxes, depreciation and amortization) margins for shopping centers and BPO (business process outsourcing) office buildings all improved in the first quarter and contributed to the increase in net income margin to 15 percent, from 13 percent a year earlier.
“Demand remains strong and we are very pleased that all of our major business lines are doing very well. Our sales take-up for residential was again a new record for quarterly sales and puts us well on track to achieving our targets for the year, especially with our higher value launches still to come. The launch of Santierra Phase 3 in Nuvali last week was also a huge success, with 88 percent of the 167 lots offered being taken up within the span of just one week,” said ALI chief finance officer Jaime E. Ysmael.
“Our commercial spaces are likewise achieving very good occupancy rates and on top of this we have an exciting pipeline of projects that will be coming onstream over the next few years. Abreeza Mall in Davao, for example, will be opening officially tomorrow and has exceeded our targets in terms of occupancy and lease rates. All in all, we are very excited for the rest of the year,” Ysmael added.
ALI’s property development business, which includes the sale of residential lots and units as well as the sale of commercial and industrial lots, registered revenues of P6.3 billion, 24 percent higher than the P5.1 billion reported a year earlier.
Revenues from the residential segment amounted to P5.8 billion, 18 percent more than the previous level as the value of bookings improved across all of the company’s brands (Ayala Land Premier, Alveo, Avida and Amaia).
Meanwhile, revenues from the sale of commercial and industrial lots jumped 155 percent to P560 million, largely due to the sale of seven commercial lots in Nuvali and 1.4 hectares of industrial lots at the Laguna Technopark.
Total revenues for the commercial leasing business, which comprises the shopping center and office leasing operations, amounted to P1.7 billion, up 16 percent from P1.5 billion.
Revenues from shopping centers increased 11 percent to P1.1 billion, driven by higher average occupancy and lease rates. Average occupancy rate across all malls reached 97 percent, compared with 93 percent a year ago.
Office leasing operations pumped in revenues of P583 million, up by 25 percent mostly due to the 27 percent year-on-year increase in occupancy of BPO office spaces, as the outlook for and demand from the BPO industry continues to improve.
Revenues of the hotels and resorts business improved 16 percent to P560 million, largely due to the impact of the consolidation of the El Nido Resorts operations in Palawan, through the acquisition of a 60 percent stake in the Ten Knots Group in April 2010. A total of 150 island resort rooms in Lagen, Miniloc and Apulit Island (formerly Club Noah) were added to the hotels and resorts portfolio that also currently operates 634 branded hotel rooms between Hotel InterContinental Manila and Cebu City Marriott.
The company is also currently constructing its first three owner-operated businessman’s hotels in Bonifacio Global City, Davao and Cagayan de Oro targeted to begin operations by next year.
ALI continues to secure attractive landbank parcels which will serve as platforms in support of its aggressive strategy to develop growth centers across the country. Earlier this year, the Company secured a long-term lease with the University of the Philippines for a 7.4-hectare parcel of land which will be transformed into a retail and office complex.
Subsidiary Alveo Land, meanwhile, signed a Memorandum of agreement with the Philippine Racing Club, Inc. for the joint development of a 21-hectare property in Makati City (located on the site of the former Sta. Ana racetrack) which will have residential, retail, office and entertainment components.