Ayala Land Inc. is looking at a likely sharp rebound – a “V-shaped recovery” – after the coronavirus disease 2019 (COVID-19) pandemic, with a return to a pre-COVID performance possible in two to three years time, according to Bernard Vincent Dy, Ayala Land president.
Dy said the recovery is anchored on the traction of the COVID-19 inoculation initiative of the country this year.
“Although we are still in the middle of the pandemic, we are hopeful the economy would continue to improve as the vaccine rollout gains traction in 2021. We believe this health crisis has inevitably caused temporary and permanent shifts in consumer behavior, affecting our business lines in numerous ways. Each business unit is carefully adjusting their strategies and practices to strengthen our market position and reinvent some of our business models to adapt to the new environment,” Dy said during the company’s shareholders meeting Wedneday.
“We are working towards a V-shape recovery and I am confident that we have the institutional capability, required resources, and a strong balance sheet to achieve this objective,” he added.
Dy said the company has allocated P88 billion in capital expenditures for the year, looking to launch P100 billion worth of residential units.
“With 30 estates across the country and more than 12 thousand hectares of land bank, we face the year confident in our ability to seize new opportunities in an evolving business climate,” Dy said.
Dy said last year’s experience “was unlike any other.”
The imposition of the enhanced community quarantine (ECQ) in March last year, forced majority of Ayala Land’s businesses to scale back operations overnight.
“With the economy contracting at an unprecedented rate, we focused on preserving the value of our company
by keeping our assets, mainly prime real estate and commercial properties, intact,” he said.
“As a result, we deferred plans to acquire new land, tempered project launches and rationalized spending. Capital expenditures were reduced to P63.7 billion from the initial budget of P100 billion and projects launched were only at P10.6 billion. Direct operating expenses were scaled back by P11.9 billion, amounting to a 42 percent reduction from previous year. We tightened our general and administrative expenses that led to a 14 percent decrease from a year ago, equivalent to P1.4 billion in savings. Furthermore, we refinanced some of our loans to take advantage of record-low interest rates,” he added.
The efforts enabled Ayala Land to maintain its financial strength, noted Dy, with the company ending 2020 with a net debt-to-equity ratio of 0.74:1 and an average borrowing cost of 4.7 percent, an improvement from 0.78:1 and 5.2 percent, respectively, in 2019.
“Moreover, we had the capacity to disburse dividends amounting to P4.0 billion. The market rewarded our efforts as our share price bounced back to P40.90 by year-end from a low of P22.95 at the early stages of the pandemic in March,” he said.
Ayala closed 2020 with profit of P8.7 billion, down 74 percent from P33.2 billion the prior year. Revenues reached P96.3 billion, down 43 percent from 2019’s P168.8 billion.
