ALI seen to earn P40 B in 2020

Ayala Land Inc. (ALI) is seen hitting its 2020 net income target of P40 billion, according to stock market online research firm 2TradeAsia.com.

In a research note, 2TradeAsia said ALI delivered strong growth last year, putting it close to its target.

“After delivering 21 percent growth in earnings for 2017 at P25.3 billion, ALI is on track with its P40 billion net income target by 2020. Return on Equity stood at 16 percent as of December 2017 (from 14.9 percent), while low cost of debt (4.6 percent) plus longer maturities supported the firm’s capital efficiency,” 2Trade Asia said in its report.

The brokerage firm noted the company’s strong recurring income with its wide portfolio of income sources.

“P125 billion worth of projects will be launched this year, 80 percent will cover residential, the balance for leasing,” it said.

It added that ALI’s recurring income will be strengthened by two malls that will come on stream in BGC and Manila, two office buildings in Ayala North Exchange & Vertis North BPO3, plus two Hotels and Resorts in Huni Sicogon Phase 1 and Seda Lio.

ALI closed 2017 with its mall gross leasable area at 1.8 million square meters and 1.02 million sqm of office space. It also has 2,583 hotel rooms.

This year, ALI will be pouring in P111 billion for its capex with bulk going to residential projects.

“After spending P91.4 billion in capex last year, ALI will embark on P111 billion in capex for 2018, 43 percent of which will be for residential (P47.4 billion), 17 percent for malls (P18.7 billion), 13 percent for land purchases (P14 billion),“2TradeAsia said.

This should keep the firm on track with the company’s P29.4 billion net income forecast this year, which is above 16 percent than 2017, especially with about P125 billion worth of projects lined-up across its units, the broker firm said.

Under ALI’s 2020 plan, 50 percent of the growth will come from property development — divided equally between horizontal and vertical projects and 50 percent from leasing such as malls, office hotels and resorts.

A key component of the 2020 growth plan is to triple ALI’s leasing assets with a focused completion of investment properties.

For the malls, ALI is targeting to grow its gross leasable area to 3.10 million square meters by 2020 while its office space is targeted to grow to 1.5 million square meters. These offices are headquarter-type offices and BPO-type facilities.

Meanwhile, for its hotels and resorts, ALI plans to build a portfolio of 6,000 rooms by 2020.