Ayala Land Inc. said Monday its income June fell 19 percent to P11.5 billion in the first half from the previous year’s P14.17 billion on jittery market conditions caused by the war in the Middle East.
‘We are building a more resilient Ayala Land through disciplined capital allocation, a growing recurring income base, and a strong balance sheet,’ Anna Ma. Margarita Bautista-Dy, the company’s president and CEO, said.
‘Supported by our integrated estate model and diversified platforms, we are confident in Ayala Land’s ability to deliver sustainable growth and to remain well positioned for the opportunities ahead.’
Revenues for the period fell almost 10 percent to P75 billion from the previous P83.06 billion.
Dy said the company had a ‘challenging’ first quarter and Ayala Land had to stabilize its business in the second quarter through the reduction in its inventory to 15 months, cutting additional costs and halting projects so as not to clog the market with unsold units.
She said the company is still on track in delivering its projects, as Ayala Land will launch mostly horizontal residential projects.
Sales for the second quarter fell to P26 billion from the P27 billion in the first quarter. This was done without any launches, which would have given the company a bump in its revenues, Dy said.
Ayala Land’s property development business had P41 billion in revenues for the first half, buoyed by second-quarter revenues of P20.6 billion, flat compared to the first quarter of the year.
The leasing and hospitality businesses continued their growth trajectory with first-half revenues reaching P25.2 billion, 9 percent higher than the previous year, lifted by positive contributions across each asset class.
Revenues from shopping centers reached P12 billion, up 4 percent year-on-year, anchored on higher occupancy, increasing foot traffic, growing merchant sales and early returns from the completion of reinvention works across flagship malls.
Hospitality revenues grew 28 percent year-on-year to P6.3 billion, lifted by the solid performance of renovated facilities and the contribution of New World Makati Hotel to the topline.
The offices segment generated revenues of P6 billion on the back of healthy above-industry occupancy rates and contracted escalations from existing leases.
The company’s board has approved the infusion of four malls and three hotels with an
aggregate amount of P20 billion to Areit Inc. This infusion would expand Areit’s assets under management to P179 billion, but also further diversify its asset base across malls, offices, hotels and industrial land.
The company’s capital expenditures for the first half stood at P39.5 billion, a decline of 2 percent year-on-year. Capex for leasing businesses grew 17 percent from a year ago to P13.2 billion, directly supporting the completion and ramp-up of key recurring-income assets this year.
Dy said the company targets to spend P60 billion this year, higher than the company’s earlier pronouncements.