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L-R from top to bottom: ALI Vice President Jaime Augusto Zobel de Ayala, President Fernando Zobel de Ayala, President Bernard Vincent Dy, Chief Financial Officer Augusto Bengzon at the ALI 2020 Shareholders Meeting via Zoom
Real estate giant Ayala Land Inc. saw a 41 percent annual drop in first quarter net profit to P4.3 billion, hit by a double whammy that stemmed from the Taal volcanic eruption and the coronavirus pandemic (COVID- 19) which led to the Luzon Running of the Bulls.
“The severe impact of the ECQ (Enhanced Community Quarantine) resulting from the COVID-19 crisis and the Taal eruption caused a significant decrease in our net income. Our development business was particularly affected during the quarter as we saw buyers choose to defer purchases during this period. Our leasing assets were also significantly affected in the latter part of the quarter due to the ECQ. Given continued market uncertainty, we quickly made adjustments to our plans to ensure the long-term sustainability of the business, “ALI President and CEO Bernard Vincent O. Dy said in a statement to the Stock Exchange on Monday. Philippines.
Three-month revenue fell 28 percent year-over-year to P28.4 billion.
Property development revenue contracted 38 percent to P17.2 billion, primarily due to lower project reserves and the impact of the Taal volcano eruption in January this year on sales of its projects in the south of Luzon. This was further compounded by a lower incremental completion as construction activities were disrupted by the ECQ, according to the disclosure.
Residential revenue decreased 39 percent to P13.8 billion, while office sales revenue decreased 68 percent year-over-year to P962 million during the quarter. The earthquakes in Davao in the fourth quarter of 2019 also affected the sales of its projects in the province.
However, revenue from the sale of commercial and industrial lots grew 8 percent year-over-year to P2.5 billion primarily from existing developments such as Arca South, Seagrove and Laguna Technopark. Sales reserves were recorded at P24.7 billion, 27 percent less year-over-year, during the period.
Commercial lease income reached P8.7 billion, 5 percent less than the previous year. Sustained office leasing mitigated limited shopping center operations and resort closings during the ECQ.
Mall revenue fell 9 percent to P4.6 billion, while hotel and resort revenue ended 17 percent lower at P1.6 billion.
ALI gave up $ 2.6 billion in rents to tenants at its 32 shopping centers across the country during the ECQ of Luzon and other key cities. It has also earmarked P600 million to help unemployed workers in its ecosystem.
Office rental income, meanwhile, increased 15 percent to P2.5 billion through sustained outsourcing of business processes and headquarters buildings.
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