Posted on 10:01 PM, February 18, 2010 [ BusinessWorld Online ]
PROPERTY GIANT Ayala Land, Inc. saw profits decline by more than a tenth last year, as the global economic downturn dampened the real estate sector.
In its financial report, Ayala Land said net income dropped to P4.681 billion last year from P5.382 billion in 2008 and P5.095 billion in 2007.
This was on the back of lower revenues, which was recorded at P26.8411 billion, 8.37% lower than the P29.295 billion raised in 2008.
In a statement, the property developer also said consolidated core net income, or underlying profits, declined by 2.17% to P4.04 billion from P4.13 billion in 2008.
But its fourth-quarter financial performance improved with a P1.12-billion net income, up by 7% quarter-on-quarter and 16% year-on-year.
“While 2009 was certainly a very challenging year, the strategies we put in motion were sound and we managed to end the year strong,” said Jaime E. Ysmael, Ayala Land senior vice-president and chief finance officer.
“Real estate and hotel operations revenues were lower mostly on the company’s decision to reduce its external third-party construction contracts while aggregate consolidated revenues from the company’s core residential and leasing operations remained flat,” the firm said.
But shopping centers and corporate business margins stabilized as leased-out rates in new malls and business process outsourcing office buildings steadily moved up.
Improvement in strategic land management margins offset the decline in residential and support businesses margins that were hampered by high input costs at the start of the year, Ayala Land said.
“Total revenues for Shopping Centers rose by 4% to P4.44 billion in 2009 as its gross leasable area portfolio increased with the opening of MarQuee Mall in Angeles, Pampanga last September 2009,” the firm said.
“We see that the market recovery is well underway and thus we will be very aggressive in our project launches this year, with over 9,200 units planned for launch from 28 projects across all residential brands,” said Rex A. Mendoza, Ayala Land senior vice-president and chief marketing and sales officer.
The Ayala Land Premier brand, which caters to the high-end residential segment, launched two projects in January -- Santierra, a 77-hectare development in the company’s Nuvali township in Laguna, and Park Terraces, a multi-tower residential condominium in Ayala Center.
Ayala Land operates under three major brands -- Ayala Land Premier for the high-end segment, Alveo Land for the middle-income segment, and Avida for the “affordable” market.
Shares in the property firm closed P0.25 higher at P11.00 apiece yesterday.