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ALI earnings jump 25% to P3.46B in Q1

By Neil Jerome C. Morales (The Philippine Star) | Updated May 7, 2014 - 12:00am

MANILA, Philippines - Improved performance of the residential, shopping center, office, and hotels and resorts businesses allowed property giant Ayala Land Inc. (ALI) to grow its profits by a quarter in the first three months of the year.

Full-year growth will be supported by the ongoing expansion of its product lines in mixed-use developments, a company official said yesterday.

ALI’s net income jumped 25 percent to P3.46 billion in the first quarter from P2.76 billion a year ago while consolidated revenues rose 23 percent to P22.75 billion from P18.52 billion on the back of the “strong performance of all business units, from property development to commercial leasing, as well as the services business.”

“The solid performance of each of our business units contributed to ALI’s overall earnings. We expect sustained growth to be driven by continuous development in our mixed-use estates as we further enhance our residential, shopping center, office, and hotels and resorts offerings,” said ALI president and CEO Bernard Vincent Dy.

Bulk of revenues were derived from real estate sales that gained 19 percent to P20.98 billion, driven by the strong performance across the property development, commercial leasing and service businesses, ALI said.

Property development, which includes the sale of residential lots and units, office spaces, and commercial and industrial lots, improved 12 percent to P13.47 billion in the first quarter from P12.06 billion year-on-year.

Revenues from the residential business climbed 36 percent to P11.02 billion. Sales take-up for the first three months hit P21.29 billion, equivalent to a monthly average of P7.1 billion that is nine percent higher from P6.54 billion last year.

Combined revenues for shopping centers, office and hotels and resorts operations hit P5.28 billion, up 29 percent from P4.09 billion a year ago. Specifically, revenues from shopping centers rose 16 percent to P2.84 billion as occupied gross leasable area (GLA) rose 11 percent year-on-year.

Dy said the opening of Fairview Terraces that houses department store Wellworth added 57,000 square meters (sqm) of leasable space to ALI’s portfolio of malls, supporting the plan to grow the recurring revenue- generating side of the business.

For its part, revenues from office leasing operations surged 49 percent to P1.06 billion in the first quarter from P711 million last year. Total occupied business process outsourcing (BPO) GLA expanded to 424,529 sqm. as of end-March, up 14 percent from last year.

In terms of the tourism business, ALI said revenues of its hotels and resorts unit, which operates 2,151 hotel rooms, spiked 47 percent to P1.37 billion from P931 million year-on-year, primarily driven by improved performance of new hotels and resorts.

“We look forward to serving more people as we continue our push for expansion,” Dy said. ALI plans to launch 78 projects consisting of 30,000 residential units this year with an estimated value of P142 billion. The five residential brands of the property firm launched a total of 28,482 units worth P108 billion last year.

In a separate disclosure, parent firm Ayala Corp. (AC) said its wholly-owned subsidiary AYC Finance Ltd. has completed the issuance of $300-million bonds that are exchangeable for common shares of ALI. The bonds, which carry a yield of 0.5 percent due 2019, were listed and quoted in the Singapore Exchange yesterday.

Proceeds from the bond sale will be used for general corporate purposes, investments and operations directly under AC such as the Daang Hari-South Luzon Expressway road link project.

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