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Ayala Land Q2 net income drop slows on improving prospects

Saturday, August 8, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]


Improving prospects in the property sector have slowed down the drop in net income of major property developer Ayala Land, Inc. (ALI) for the second quarter, with the second half performance seen further improving on the back of higher domestic and foreign sales.

"The residential sector is ramping up and we are seeing an improvement in all our three brands," Jaime Ysmael, ALI chief finance officer, said in an ambush interview after ALI’s first half briefing with analysts on Friday.

Ayala Land earlier noted that sales have jumped to P1.9 billion per month as of June from P500 million at the start of the year.

Of the total sales, Mr. Ysmael said they have noticed a 36% growth in the overseas Filipino market from April to June that brought first half growth to 24% from last year’s 23%.

"Our primary market still continues to be domestic. [Consumer sentiments] are already improving and we are expanding our marketing sales efforts especially to countries that we feel are resilient," he said.

Mr. Ysmael said they are looking at further tapping the European and Middle East markets, and at the same time looking at developing a residential project in Cebu City.

From April to June, ALI’s net income dipped by 14% to P1.01 billion, while revenues fell by 2.38% to P6.98 billion. The strong second quarter performance brought the company’s first half net income to P2.07 billion, down by a third from the same period last year.

Still, the 14% decline recorded in the second quarter was lower than the 20% drop in January to June.

As of the first half, ALI’s unbooked revenue stood at P14 billion. It has also spent P7 billion of the total P17-billion budget for the year. "The company still remains committed to spending the requirement until the end of the year," Mr. Ysmael said.

ALI shares on Friday closed at P9.50 apiece, 1.06% higher from Thursday’s close. — Kristine Jane R. Liu

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