ALI to hit P10-B income goal 1 yr ahead of target

Ayala Land Inc. (ALI) is hitting its target of P10 billion in profits this year, a year ahead of the original schedule, on the back of the strong property sector.

Its expansion projects will continue next year, supported by higher capital spending, a top company executive said yesterday.

“We’re almost there... that should be achieved within the year,” ALI chief finance officer Jaime Ysmael said on the sidelines of ALI’s bond listing ceremony.

The property firm is wrapping up its 5-10-15 program, which was launched in 2009 amid the global financial crisis. It is a five-year plan ending in 2014 that aims to boost net income to P10 billion and return on equity to 15 percent.

In the first half, ALI’s profits surged 30 percent to P5.62 billion from P4.33 billion last year due to the strong performance of its property development, commercial leasing and construction businesses.

“Momentum has been sustained in the third quarter,” Ysmael said, adding that sales take-up remains very buoyant particularly on malls, offices and hotels.

For next year, the real estate arm of the Ayala conglomerate will continue taking advantage of the property boom.

“We believe the runway is still long enough for us to take advantage of,” Ysmael said.

“Now we have more land across many geographies, a significant number in Metro Manila,” he said, pointing out that the company has a significant landbank in Metro Manila that can offer more complete products spanning all income segments.

In terms of acquiring lots through reclamation, Ysmael said that “even in the past, I guess that (Manila Bay) area has been an interesting area.” But ALI has yet to decide on joining the project.

Mall and banking conglomerate SM Investments Corp. has submitted an unsolicited proposal to the Pasay City government to reclaim a 300-hectare property along Manila Bay for P54.5 billion.

Given its continued expansion, ALI expects to spend more next year.

“Naturally that number has to move up for as long as we continue to invest heavily,” Ysmael said, adding that previous project launches are funded the following year.

The property giant earmarked P65.5 billion this year for the completion of ongoing developments and launch of 69 new projects with a combined value of P129 billion.

ALI, fresh from listing P6 billion worth of long-term bonds in the Philippine Dealing & Exchange Corp. yesterday, plans to tap the capital markets anew next year.

“Definitely next year we will expand. Our capital expenditure program continues to grow so we will need funding from the capital markets,” Ysmael said.

“We’re still trying to piece together what we need,” he said, adding that ALI is looking at peso-denominated bonds due 2020.