AYALA Land Inc. said profit for the first quarter of the year dropped 41 percent to P4.3 billion from P7.29 billion a year ago, amid a challenging environment brought by the January explosion of Taal volcano and the ongoing devastation of the coronavirus disease 2019 (COVID-19).
Revenues fell 28 percent to P28.4 billion from P39.44 billion last year, “reflecting the impact of the COVID-19 enhanced community quarantine (ECQ),” the company said.
“Revenues from property development contracted by 38 percent 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. This was aggravated further by lower incremental completion as construction activities were interrupted by the ECQ,” Ayala Land said.
Residential revenues dropped 39 percent to P13.8 billion, while office for sale revenues tumbled 68 percent to P962 million.
“The earthquakes in Davao in the 4th quarter of 2019 also affected the sales of its projects in the province. Nevertheless, revenues from the sale of commercial and industrial lots grew by 8 percent to P2.5 billion mainly from existing developments such as Arca South, Seagrove, and Laguna Technopark. Sales reservations registered at P24.7 billion, 27 percent lower, during the period,” the company said.
Ayala Land said it launched four projects worth P5 billion for the period: the Avida Greendale Settings at Alviera in Pampanga, Amaia Steps The Junction Place Aria in Quezon City, Scapes Cabuyao Series 3 Area 2 in Laguna, and Bellavita Alaminos 2 in Laguna.
“While additional launches have been put on hold for the rest of the year, Ayala Land has sufficient projects in its inventory since it launched P159 billion worth of developments last year alone,” the company said.
Commercial leasing posted revenues of P8.7 billion, down 5 percent, as sustained office leasing mitigated limited mall operations and the closure of resorts during the ECQ. Shopping center revenues dropped 9 percent to P4.6 billion, while revenues from hotels and resorts ended 17 percent lower to P1.6 billion.
Office leasing revenues grew 15 percent to P2.5 billion through the sustained operations of business process outsourcing and headquarter buildings.
“The severe impact of the ECQ 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,” said Vincent Dy, Ayala Land president.
“Our leasing assets were also significantly affected in the latter part of the quarter due to the ECQ. Given the continuing market uncertainty, we quickly made adjustments in our plans to ensure the long-term sustainability of the business,” Dy added.
Ayala Land spent P21.6 billion as capital expenditure for the period, mainly for residential developments and commercial leasing assets. It earlier announced slashing its capex to P69.8 billion, from the previously planned P110 billion.
“With P23 billion in cash, unutilized credit lines of P25 billion, action plans in place for prudent cost monitoring and capital allocation, and conservative debt management, the company’s balance sheet remains robust,” Ayala Land said.
The company added it continues to pursue plans for a real estate investment trust (REIT) fund raising, the timing of which will depend on market conditions.
Ayala Land unit AREIT Inc. was the first to file an application for a REIT offering at the Securities and Exchange Commission earlier this year.
