Ayala Land net income falls on weak revenues

May 12, 2009 (The Manila Times - McClatchy-Tribune Information Services via COMTEX) -- AYAAF | Quote | Chart | News | PowerRating -- In its financial report, Ayala Land Inc. (ALI) said its profit declined 21 percent to P907 million at end-March.

Its consolidated revenues dipped 10 percent to P7.41 billion from last year. The decline was mainly due to the absence this year of large transactions, similar to last year's sale of three subsidiaries, namely Piedmont Property Ventures Inc., Stonehaven Land Inc. and Streamwood Property Inc. The sale of the three units generated P762 million in pre-tax capital gains in 2008.

Also, revenues from ALI's residential development business decreased by 11 percent to P3.13 billion, with mixed results posted by its various brand segments.

"Revenues of the middle and affordable segments remained steady, with ALVEO revenues lower by just 1 percent while those of AVIDA increased by 4 percent, as significant progress completion on projects under construction offset the decline in new bookings," the company said.

ALI said sales of its high-end unit, Ayala Land Premier, dropped 24 percent mainly due to lower new bookings for the quarter.

The company's support businesses--construction, Property Management and hotels, also saw an 8-percent dip in revenues to P1.88 billion brought about by the impact of higher average costs in the construction business.

Contributions from ALI's shopping centers rose by 6 percent to P1.10 billion, driven by the strong performance of Market! Market! as well as improved sales among Ayala Center's land lease tenants.

Revenues from the company's corporate business surged 67 percent higher to P455 million from a year ago. The significant growth was driven largely by the opening of new business process outsourcing (BPO) facilities, which were turned over and which became operational in the last two quarters.

Revenues of the company's Strategic Landbank Management Group jumped 82 percent to P542 million, mostly due to the progress of construction completion of its share in booked sales at NUVALI, the firm's latest integrated development project.

ALI spent a total of P3.50 billion for project and capital expenditures, 18 percent less than the same period in 2008. This represented 20 percent of the full year capital expenditure budget of P17.40 billion.

"We had a challenging first quarter and while we expect the market to remain volatile, our financial condition remains strong as a result of efforts to maintain liquidity and boost our cash position. We are committed to completing and delivering all of our projects on schedule this year," Jaime Ysmael, ALI chief financial officer, said.

Consolidated cash and cash equivalents stood at P17.10 billion, while the company's current ratio--a comparison of its current assets to current liabilities--stood at 2.02:1. Its consolidated borrowings reached P18.70 billion, up from P16.80 billion at end-December.

The company's shares closed higher Monday at P7.50 per share from its previous close of P7.40 per share.

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