Ayala Land (ALI) Q2 2024 earnings summary

Executive summary

• Revenues for 1H 2024 reached PHP 84.3 billion, up 28% year-on-year, surpassing pre-pandemic levels and driven by strong residential bookings, commercial lot sales, and robust leasing operations.

• Net income rose 15% year-on-year to PHP 13.13 billion, with strong performance across all business lines and healthy demand for premium residential products.

• Growth was supported by higher occupancy and rents in leasing, increased external construction projects, and premium segment sales.

• Capital expenditures for 1H 2024 totaled PHP 36.51 billion, supporting residential and commercial project expansion.

• Inventory levels improved to 19 months, with a target to reduce to 16-18 months by year-end.

Financial highlights

• Property development revenues increased 34% to PHP 51.9 billion, with residential revenues up 40% to PHP 43.7 billion.

• Commercial leasing revenues rose 10% to PHP 22.1 billion; shopping center revenues up 8%, office leasing up 6%, hotel and resort revenues up 19%.

• Service businesses grew 51% to PHP 8.4 billion, driven by construction and airline sales.

• EBIT margin at 31.8%, down from 34.1% last year due to higher OPEX and selective discounting.

• Net gearing ratio improved to 0.73:1 from 0.75:1 last year.

Outlook and guidance

• Projecting PHP 85 billion in launches for 2024, a 12% increase over 2023.

• CapEx guidance of PHP 100 billion for the year remains intact, with faster spending expected in the second half.

• Leasing pipeline includes 46,000 sqm GLA in malls and 95,000 sqm GLA in offices opening within the year.

• Expecting improvements in core residential sales as interest rates decline.

• Focus on sales efficiency and strategic phasing of launches to manage inventory.