ALI profit drop 74% to P8.7 B in 2020, sets higher capex of P88 B

Published February 25, 2021, 6:00 AM

by James A. Loyola

Real estate giant Ayala Land Inc. posted a 74 percent drop in net income to P8.7 billion last year from P33.2 billion in 2019 but is increasing capital expenditures as it is optimistic of a recovery in 2021.

 In a media briefing, ALI President and CEO Bernard Vincent O. Dy said the firm endured the severe impact of COVID-19 on its 2020 operations as key indicators improved steadily towards the end of the year.

ALI recorded a 43 percent decline in consolidated revenues to P96.3 billion from P168.8 billion a year ago but sustained the momentum for recovery from the third to the fourth quarter.

It recorded a 49 percent growth in total revenues to P33.0 billion in the fourth quarter of 2020 and a 28 percent jump in net income to P2.4 billion for the period.

“There was no escaping the major disruption caused by the pandemic in 2020, but our company’s performance in the latter part of the year was encouraging and provides a baseline for our recovery plans moving forward,” said Dy. 

He noted that, “In 2020, greater value was placed on maintaining a strong balance sheet to weather this crisis and prepare our company to resume our growth aspirations. Operating procedures were also put in place to ensure the safety of our people and our customers and initiatives were introduced to provide assistance to various stakeholders during this difficult period.”

While revenues from property development dipped to P66.5 billion for the year due to construction restrictions and lower bookings, this soared 64 percent to P25.8 billion in the fourth quarter from the third quarter of 2020, boosted by continuous construction progress in 174 projects across the country. 

Despite limited sales mobility, sales reservations also registered at P81.9 billion – 56 percent of the level in 2019. Fourth quarter sales reservations furthermore reached P21.1 billion, 58 percent of pre-COVID levels due to sustained property demand.

Commercial leasing revenues contracted 44 percent to P21.9 billion in 2020 given limited mall and hotel operations, although mall revenues grew 10 percent to P1.7 billion in the fourth quarter from the third quarter on account of less strict community quarantine restrictions coupled with the holiday season boost. 

The latter part of 2020 also saw El Nido Resorts and Lio Tourism Estate hosting more travel bubbles to the public in close coordination with the Department of Tourism and the local government units.

From only four in the third quarter, a total of 37 travel bubbles were launched in the fourth quarter driving a 52 percent increase in revenues to P787 million.

Dy said ALI is allotting P88 billion in capital expenditures this year from the P63.7 billion spent in 2020 while looking to launch projects worth P100 billion.

The largest share of capex (44 percent) will go to the residential business, 26 percent for land acquisition, 13 percent for estate development, 6 percent for malls, 5 percent for offices, 3 percent for hotels and resorts, and 3 percent for other purposes.

To help fund its capex ALI has filed with the Securities and Exchange Commission a new 3-year shelf registration of up to P50 billion of debt securities.

The firm said it is raising up to P41 billion through the issuance of retail bonds or corporate notes for listing on the Philippine Dealing and Exchange Corporation, or bilateral term loans for the purpose of refinancing outstanding loans and to partially finance general corporate requirements.