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Ayala Land hikes capex after posting 31% growth

Posted on February 15, 2012 10:23:57 PM [ BusinessWorld Online ]

PROPERTY DEVELOPER Ayala Land, Inc. is gearing up for higher capital spending this year after ending 2011 with a 31% profit hike, documents released yesterday showed.

“For 2012, the company has earmarked another P37 billion for capital expenditures, largely for the completion of ongoing developments, the launch of new residential and leasing projects, and the acquisition of new land bank which will help sustain the company’s growth trajectory over the coming years,” Jaime E. Ysmael, Ayala Land chief finance officer said in a press statement.

This figure is 23.17% higher than last year’s capital expenditure of P29.92 billion, a bulk of which was spent for residential development.

More than half, or 56%, of the company’s capital budget for 2012 will go to its residential business, 17% to leasing operations for malls and offices, 12% for hotels, and the remainder to go to land banking initiatives, Mr. Ysmael told reporters in an interview yesterday.

“We plan to launch about the same number of projects this year (67) but 29% higher in value and 20% more in the number of units. We remain well positioned to pursue our growth moving forward and achieving the goals we set out to do,” Antonio T. Aquino, Ayala Land president, said in the statement.

The amount will be funded via the possible issuance of local, long-tenor corporate bonds worth P10 billion to P15 billion within the year’s first semester in light of low interest rates, Mr. Aquino said.

This comes as Ayala Land hiked its net income last year by 31% to a record P7.14 billion versus P5.46 billion generated in 2010, slightly lower than the 35% growth it posted two years ago when it increased its net income to a then-record P5.5 billion.

“We had another banner year in 2011 thanks to the strong revenue growth and margin improvements achieved by our key businesses,” Mr. Aquino noted.

The firm’s total consolidated revenues rose by 17% to P44.21 billion, with combined real estate and hotel revenues climbing by 16% to P41.23 billion.

Total expenses grew by 12% to P33.50 billion in 2011.

Ayala Land’s property development unit hiked its revenues last year by 27% to P25.26 billion, a bulk of which was derived from the luxury Ayala Land Premier brand that increased its revenues by 36% to P9.51 billion year-on-year.

Middle-income Alveo and affordable Avida last year generated 15% and 44% revenue growth respectively, following the strong sales of newly-launched projects, while low-cost Amaia recorded P841-million revenues from its maiden project AmaiaScapes Laguna.

For this year, Ayala Land’s property development unit is aiming to launch 24,800 units across all residential brands versus 20,613 units last year after sales take-up value for the division reached a monthly average of P4.31 billion, 56% higher than the P2.76-billion monthly average in 2010. -- Franz Jonathan G. de la Fuente

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