Ayala Land weathers pandemic impact as recovery gains momentum

Ayala Land Inc. (ALI) 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% decline in consolidated revenues to P96.3 billion from P168.8 billion a year ago, and a 74% drop in net income to P8.7 billion from P33.2 billion in 2019.  The company sustained the momentum for recovery from the third to the fourth quarter however, recording a 49% growth in total revenues quarter-on-quarter to P33.0 billion and a 28% 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.  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,” said ALI President and CEO Bernard Vincent O. Dy

While revenues from property development dipped to P66.5 billion for the year due to construction restrictions and lower bookings, this soared 64% 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% of the level in 2019. Fourth quarter sales reservations furthermore reached P21.1 billion, 58% of pre-COVID levels due to sustained property demand.

Commercial leasing revenues contracted 44% to P21.9 billion in 2020 given limited mall and hotel operations, although mall revenues grew 10% 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% increase in revenues to P787 million.

ALI’s capital expenditures reached P63.7 billion in 2020, in line with the revised full-year budget. These were allocated mainly for the completion of residential and commercial leasing assets, with a portion spent on land acquisition and development of estates. Financial sustainability initiatives for the year also helped to strengthen the balance sheet further with the net gearing ratio improving to 0.74:1 from 0.78:1 in full-year 2019.

Ayala Land continues to be a pioneer in the industry as its subsidiary AREIT Inc. became the country’s first Real Estate Investment Trust listing at the Philippine Stock Exchange last year. The landmark listing saw AREIT raise net proceeds of P12.3 billion through an initial public offering that received an Issuer Credit Rating of PRS Aaa, with a Stable Outlook from the Philippine Rating Services Corporation (PhilRatings).

Aiming to promote and strengthen the country’s capital markets and provide broader investment options for Filipinos, AREIT plans to double its leasable portfolio within the next few years. The company has 344,000 square meters of leasable space from its six commercial properties valued at P37 billion.