Property developer Ayala Land Inc. on Monday said its income in the January-to-March period fell 41 percent to P4.32 billion, from last year’s P7.32 billion, on lower revenue generation.
The company said the twin effects of the Taal Volcano eruption in January and the lockdown in key cities of the country starting mid-March caused revenues in the first quarter to fall by 28 percent to P28.4 billion, from last year’s P39.68 billion.
Revenues from property development declined 38 percent to P17.2 billion, mainly due to lower project bookings and the impact of the Taal Volcano eruption in January this year on the sales of its projects in southern Luzon. This was aggravated further by lower incremental completion as construction activities were interrupted by the enhanced community quarantine.
“Our development business was particularly hit hard during the quarter as we saw buyers opting to defer purchases during this period. Our leasing assets were also significantly affected in the latter part of the quarter due to the ECQ [enhanced community quarantine],” said company President and CEO Bernard Vincent O. Dy.
“Given the continuing market uncertainty, we quickly made adjustments in our plans to ensure the long-term sustainability of the business,” Dy added.
The company said it will pursue plans for its real estate investment trust (REIT) offering, but the timing of which will depend on market conditions. It keeps its REIT application with the Securities and Exchange Commission (SEC) updated and active.
Its unit AREIT Inc. was the first to file its application for an REIT offering at the SEC earlier this year, following the release of the revised implementing rules and regulations of the Republic Act 9856, or the Real Estate Investment Trust Act of 2009, last January 20.
Most of the company’s revenue sources registered declines. Residential revenues dropped by 39 percent to P13.8 billion while office for sale revenues slid 68 percent to P962 million, as earthquakes in Davao in the fourth quarter last year also affected the sales of its projects in the province.
Revenues from the sale of commercial and industrial lots grew by 8 percent to P2.5 billion, mainly from existing developments, such as Arca South, Seagrove and Laguna Technopark. Sales reservations registered at P24.7 billion, 27 percent lower during the period, the company said.
Commercial leasing revenues, meanwhile, fell 5 percent to P8.7 billion as sustained office leasing mitigated limited mall operations and the closure of resorts brought about by the lockdown.
Shopping center revenues dropped 9 percent to P4.6 billion while revenues from hotels and resorts was 17 percent lower to P1.6 billion. Office leasing revenues, meanwhile, managed to grow by 15 percent to P2.5 billion through the sustained operations of business process outsourcing firms and headquarter buildings.
The company said it was able to launch four projects valued at P5 billion during the three-month period. These were Avida Greendale Settings at Alviera in Pampanga, Amaia Steps The Junction Place Aria in Quezon City, Scapes Cabuyao Series 3 Area 2 in Laguna and Bellavita Alaminos 2 in Laguna.
The company earlier said it is putting on hold all of its launches for the year, but it has sufficient projects in its inventory since it launched P159 billion worth of developments last year alone.
Capital expenditures (capex) reached P21.6 billion in the period, mainly for residential developments and commercial leasing assets. The full year capex estimate has been reduced to P69.8 billion from the previously planned P110 billion.
The company said it has P23 billion in cash and unutilized credit lines of P25 billion from the banks.