Ayala Land’s Q1 profit falls 41%

May 12, 2020

Ayala Land Inc. has reported a 41-percent decline in its net income in the first quarter, attributed to the impact of enhanced community quarantine  measures due to the coronavirus disease 2019 ) pandemic. 

In a statement, ALI said net income reached P4.3 billion in the January to March period from P7.3 billion during the same period last year. 

Its consolidated revenues also declined by 28 percent to P28.4 billion from P39.7 billion.         

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. 

“The severe impact of the ECQ resulting from the Covid-19 crisis and the Taal (Volcano) 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. 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,” ALI president and chief executive officer Bernard Vincent Dy said.

Residential revenues declined 39 percent to P13.8 billion while office for sale revenues dropped by 68 percent to P962 million. The earthquakes in Davao in the fourth 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 eight percent to P2.5 billion mainly from existing developments such as Arca South, Seagrove, and Laguna Technopark. 

Commercial leasing revenues reached P8.7 billion, a slight five-percent dip 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, meanwhile, increased by 15 percent to P2.5 billion through the sustained operations of business process outsourcing and headquarters buildings. 

Meanwhile, ALI has waived about P2.6 billion worth of rent from tenants in its 32 shopping malls nationwide during the ECQ of Luzon and other key cities. 

It has also earmarked P600 million to assist no-work-no-pay workers in its eco-system.

The company also ran an internal campaign called “ALI Pays it Forward” wherein it raised a total of P82.6 million through the participation of 99.9 percent of ALI Group Employees to support the three designated public hospitals as exclusive facilities to fight the disease (Philippine General Hospital, Lung Center of the Philippines and Dr. Jose N. Rodriguez Memorial Hospital), and Caritas Manila. 

For Project Ugnayan, the ALI Group, together with its partners, raised a total of P426 million in donations.

Its wholly-owned construction company, MDC, transformed the World Trade Center into a 500-bed quarantine facility and retrofitted the Philippine Red Cross lobby into a Covid-19 testing laboratory to process 3,000 tests per day. 

In partnership with AC Health, ALI’s healthcare subsidiary, Qualimed also expanded its hospital in Nuvali to create a Covid-19 dedicated facility including a triage tent, sampling room, PCR lab, doctor's office, nurse station, and personal protective equipment changing rooms. 

“We continue to provide assistance in various ways to help our country through this crisis. At the same time, we have completed plans to restart our various businesses post-ECQ.  We expect the buildup to be gradual and to take some time. We are confident, however, that once the business environment normalizes, our products and services will continue to be well-positioned to benefit from the renewed growth of the Philippine economy,” Dy added.