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, driven by strong residential bookings, commercial lot sales, and robust leasing operations.

• Net income rose 15% year-on-year to PHP 13.13 billion, supported by robust property demand, consumer activity, and healthy leasing and service business growth.

• Growth was fueled by higher occupancy and rents in leasing, increased external construction projects, and strong demand for premium residential products.

• Inventory improved to 19 months from 22 months last year, with a strategic focus on premium residential segment.

• Capital expenditures for the period totaled PHP 36.5 billion, supporting residential and commercial project expansion.

Financial highlights

• Property development revenues increased 34% to PHP 51.9 billion, with residential revenues up 40% and office/lot for sale up 9%.

• Commercial leasing revenues grew 10% to PHP 22.1 billion; hotel and resort revenues up 19% to PHP 5 billion.

• Service businesses posted 51% growth to PHP 8.4 billion, with construction revenues doubling to PHP 5.5 billion.

• EBIT margin stood at 31.8%, down from 34.1% last year; general and administrative expense ratio improved to 5.4% from 6.3%.

• CapEx at PHP 36.5 billion, with a full-year budget of PHP 100 billion.

Outlook and guidance

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

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

• Targeting inventory levels of 16-18 months by year-end and confident in sustaining mid-teens pre-sales growth.

• Margin guidance remains at 30%-35% EBIT, with investments in quality and customer experience.

• The company expects continued growth aligned with the Philippine economy and is monitoring interest rate fluctuations.