ALI earns P1.8 B in semester, up 63%

Manila Bulletin

August 12, 2005

 

ALI earns P1.8 B in semester, up 63%

 

Ayala Land Inc. said its net profit in the second quarter to June rose 4.4 percent to P640 million from P613 million a year earlier, buoyed by a sustained rise in mall rentals and property sales despite political and economic uncertainties.

Net profit for the first half rose 63 percent to R1.8 billion from R1.1 billion a year earlier.

The first-half earnings include a capital gain, booked in the first quarter, from the sale of the company’s interest in preferred redeemable shares of Astoria Investment Ventures Inc.

Total revenue grew by 10.7 percent to R4.84 billion in the second quarter from R4.37 billion a year earlier, and 46 percent year-on-year to R11.8 billion in the first half.

Revenue from development projects grew 13 percent year-on-year to R4.2 billion and contributed 35 percent of total revenues in the first half.

Revenue from leasing operations, including those from its high-end shopping malls, rose 16 percent to R3.0 billion, contributing 26 percent of total revenue.

Revenue from services grew 12 percent to R1.3 billion, accounting for 11 percent of total revenue.

ALI said it will continue to tap new growth sources and make its presence felt in new geographic areas amid a "challenging" business environment.

ALI — builder of upscale malls, high-rise office and residential condominiums, and quaint residential villages — said its net income was R640 million in April to June against a restated R613 million in the same period in 2004.

The company, majority-owned by the country’s oldest conglomerate Ayala Corp., earlier said it sees its 2005 net income rising by double-digit levels from profits of R3 billion in 2004, boosted by asset sales early in the year.

Analysts said the company is likely to be shielded from negative sentiment arising from soaring oil and consumer prices and a political crisis at home as it focuses its marketing on middle- to upper-income classes and Filipinos working overseas.

ALI said it will pay a regular cash dividend of R0.03 a share and a special cash dividend of R0.14 a share to shareholders on record as of Sept. 9. Payment is set for Oct. 3, it said.

Sales of non-core assets would also support ALI’s profit growth this year, they said.

"Even if there will be a slowdown in property buying locally, this will be offset by purchases by Filipinos working overseas and those who have settled abroad but have plans of eventually retiring back home," said Leo Venezuela, analyst at ATR Kim Eng Securities.

The firm has set up a team that will tap nearly 8.5 million overseas Filipino workers (OFWs) to boost property sales.

An official of ALI’s international sales arm previously said the campaign could generate up to a fifth of the group’s total property sales this year.

An analyst from a foreign brokerage house who asked for anonymity said Ayala Land’s property sales are generally not affected by swings in mortgage loan rates because most of the firm’s buyers are cash rich.

"Up to the second quarter the company had significant purchases from OFWs," the analyst said.

ALI sold its entire interest in the Metro Rail Transit project in a $65 million deal with Goldman Sachs (Asia) in late March. It expects to sell more non-core assets, hopefully within the year, the company earlier said.