Ayala Land Net Income Up 16% to PhP29B in 2018

Ayala Land Inc. (PSE: ALI), the Philippine’s largest integrated property and sustainable estates developer, posted solid top-line and bottom-line growth in 2018.

ALI’s consolidated revenues climbed 17% to PhP166.2 billion, driven by sustained demand for residential products and the healthy performance of its leasing businesses. Property development revenues rose by 18% to PhP113.4 billion owing to strong sales across its residential, office for sale and commercial lot segments. Meanwhile, leasing revenues grew by 17% to PhP34.9 billion on the back of robust local consumption, the increasing demand in BPO offices and a thriving tourism sector. All in all, net income grew by 16% to PhP29.2 billion.

“As we celebrated our 30th year in 2018, we remained focused on developing more sustainable communities that enrich the lives of Filipinos. We introduced two new estates to bring our total to 26, registered the highest level of residential sales in our history, and stayed on track to open more commercial developments. These led to strong financial results and positioned our company for continued growth in the coming years,” said Bernard Vincent O. Dy, ALI president and CEO.

In 2018, ALI added two new developments to its roster of sustainable mixed-use estates – Park Links, a 35- hectare urban estate located along the C5 corridor and a joint venture with Eton Properties; and Habini Bay, a 526-hectare estate in Laguindingan, Misamis Oriental, which is a joint development project with parent company Ayala Corporation.

Property Development

Ayala Land launched PhP139.4 billion worth of residential and office for sale projects in 2018. Reservation sales reached PhP141.9 billion, 16% higher thanPhP122 billion of the previous year. This was driven by strong demand from local and overseas Filipinos which accounted for 82% of total sales. Net booked sales grew 14% to PhP110.8 billion fromPhP96.9 billion in the previous year.

Revenues from the sale of residential lots and units rose 18% to PhP94.6 billion in 2018. In addition, revenues from the sale of office spaces reached P11 billion, 16% higher driven by bookings from One Vertis Plaza in Vertis North, Quezon City and The Stiles East Enterprise Plaza in Circuit Makati. Revenues from the sale of commercial and industrial lots reached P7.7 billion, up 10% from the sale of commercial lots in Vis-Min estates and Evo City and industrial lots in Alviera, Pampanga and Cavite Technopark.

Shopping Centers, Offices, Hotels and Resorts

The company opened three new malls in 2018, namely, Circuit Mall in Makati with 52,000 sqm of gross leasable area (GLA), Capitol Central Mall in Bacolod with 67,000 sqm of GLA and One Bonifacio High Street in Taguig with 23,000 sqm of GLA. This brings the total GLA of Shopping Centers to 1.9 million sqm at the end of 2018. Revenues from shopping centers reached PhP19.9 billion, 13% higher than a year ago.

ALI likewise completed new offices in 2018, namely, Bacolod Capitol Corporate Center with 11,000 sqm of GLA, Vertis North Corporate Center 3 with 38,000 sqm of GLA, and Ayala North Exchange with 20,000 sqm of GLA in its HQ tower and 22,000 sqm of GLA in its BPO Tower. This brings the current total GLA of Office Leasing to 1.11 million sqm. Driven by its new openings, Office Leasing revenues likewise rose 29% to PhP8.6 billion.

The robust tourism sector likewise supported ALI’s hotels and resorts business. In 2018, the company leveraged on its push towards sustainable tourism with the launch of new hotel and resort rooms that brought its total to 2,973 rooms by the end of the year. A total of 390 rooms were added across its portfolio of Seda hotels, and B&B rooms in Lio and Sicogon eco-tourism estates. Revenues from the business unit reached PhP6.4 billion, up by 14% than in 2017.

ALI spent a record PhP110.1 billion in capital expenditures. 41% was spent on residential projects, 23% on commercial projects, 15% for land acquisition, 12% for the development of estates and 9% for investments.

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Insurance Firms Allowed to Invest in Infra Projects

By Chino S. Leyco, Manila Bulletin

The Insurance Commission has released a circular allowing insurance companies to invest in the government’s infrastructure projects.

Based on the agency’s circular letter No. 2018-74, insurance and reinsurance firms may now invest in debt or equity security instruments for infrastructure projects.

The insurance company may participate in the project as a proponent or financiers, sponsors, or operation and maintenance contract, the agency said.

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DOE Gives Mass Approval to Energy Projects

By Myrna M. Velasco, Manila Bulletin

The roll of “energy projects of national significance” (EPNS) had been extraordinarily beefed up with the mass approval extended by the Department of Energy (DOE) to proposed power facilities—primarily for projects lined up by the National Grid Corporation of the Philippines (NGCP) and state-run National Power Corp. (NAPOCOR).

By itself, the biggest project that was granted a certificate of energy project of national significance (CEPNS) is the 1,338-megawatt GNPower Dinginin coal-fired power project in Mariveles, Bataan.

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China’s State Grid Brings Solar Power to Zambales

Manila Bulletin

The State Grid Corporation of China (SGCC), the technical partner of power grid operator National Grip Corp. of the Philippines, is spearheading efforts to provide solar power in Zambales that would benefit over 1,000 residents in the province.

The move comes on the heels of Chinese President Xi Jinping’s visit to the Philippines last year where he assured that China would continue to extend its support to the Philippines in various aspects of business.

Thus, as part of improving relations between the two countries, SGCC signed recently a memorandum of agreement with the National Electrification Administration (NEA) and the Zambales II Electric Cooperative (ZAMECO II) for a solar project.

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Mitsubishi Motors Helps Build New Elementary School Building in the Philippines

Mitsubishi Motors Corp. and the company’s employees have together donated 3 million yen to build a new classroom building for the Camayse Elementary School in Santa Rita City, Samar.

The donation was made from the company’s STEP Fund, which matches voluntary donations made by employees with an equivalent contribution from Mitsubishi Motors.

Mitsubishi Motors STEP Funds has worked for many years with World Vision Japan (WVJ), a Japanese NGO in partnership with World Vision (WV) an international Christian relief, development and advocacy organization, which helped select the Camayse Elementary School as the recipient of the donation. The World Vision Development Foundation (WVDF) a WV partner in the Philippines helped engage with the local community and carried out the construction of the new building, which was completed in January 2019.

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Foreign Portfolio Investment Transactions Yield Net Inflows in January

Registered investments for the month of January 2019 amounted to $2.1 billion, increasing by 30.5% compared to $1.6 billion inflows for December 2018. Similarly, inflows reflected a 27% growth relative to levels recorded a year ago ($1.6 billion). About 71.6% of investments registered during the month were in PSE-listed securities (pertaining mainly to holding firms, property companies, banks, food, beverage and tobacco companies, and retail companies), while the 28.4% balance went to Peso government securities (GS) and Peso time deposits (TDs). The United Kingdom, the United States (US), Singapore, Norway, and Hong Kong were the top five investor countries for the month, with combined share to total at 74.7%.

Outflows for the month ($1.299 billion) were lower compared to figures recorded for December 2018 ($1.302 billion or by 0.2%) and January 2018 ($1.5 billion or by 11.1%). The US continued to be the main destination of outflows, receiving 78.4% of total remittances.

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STI Posts 9M Net Income of PhP190M

STI Education Systems Holdings Inc. (PSE: STI), which owns one of the largest networks of private schools in the Philippines, recorded a net income of PhP190.4 million for the past nine months ending December 31, 2018.

During the same period, the company also generated PhP2 billion in gross revenues and a gross profit of PhP1.2 billion.

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Jollibee Reports 17% Profit Growth in 2018

Jollibee Foods Corp. (PSE: JFC), the largest Asian food service company, opened a total of 502 stores in 2018, the highest number of new stores opened in a year in JFC’s 40-year history. System-wide sales, a measure of all sales to consumers, both from company owned and franchise stores, grew by 22% in the fourth quarter of 2018 (4Q) compared to the same period in 2017, and by 23.5% for the entire year 2018. Excluding the impact of the consolidation of Smashburger into JFC effective April 2018, system-wide sales grew by 13.6% in 4Q 2018 year-on-year, and by 16.6% for the full year 2018.

In the Philippines, sales of its restaurant chains grew by 15.1% for the entire year, driven by 8.2% contribution from new stores and 6.9% same store sales growth. Same store sales growth pertains to restaurants that were already open for at least 15 months. It excludes sales growth from new store opening. Sales of stores abroad rose by 55.5%, led by the North America business, which grew by 161.1% due to the consolidation of Smashburger (21.7% ex-Smashburger), Europe, Middle East, and Asia ex-Philippines (EMEAA) business grew by 42.7% (28.6% ex-SuperFoods) and the China business by 9.1%.

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