By Arra B. Francia, Senior Reporter

AYALA LAND, Inc. (ALI) reported its net income jumped by 10.4% in the second quarter of 2019, amid flat revenue growth as the company saw a delay in project launches due to the midterm elections.

The listed property developer reported on Monday that net income rose to P7.8 billion in the April to June period, while revenues were flat at P43.5 billion.

This pushed net income 12% higher to P15.2 billion in the first six months of the year, with revenues up by four percent to P83.2 billion.

“We continue to benefit from the strong economic growth of the country. Results from our various business lines continue to be good, with notable performances in our leasing portfolio and the sales of office condominiums and commercial lots,” ALI President and Chief Executive Officer Bernard Vincent O. Dy said in a statement.

The company reported an 11% decline in residential revenues to P44.5 billion, due to lower inventory from upscale brands Ayala Land Premier and Alveo Land. This was coupled by delays in project launches — ALI only launched 13 projects worth P19.5 billion during the January to June period.

“We faced challenges in meeting our launch targets, as the midterm elections caused delays in securing permits…Our target for launches remains, it’s at P130 billion for the year,” ALI Chief Finance Officer Augusto Cesar D. Bengzon said in a press briefing in Makati yesterday.

Mr. Bengzon said they can launch about P111 billion worth of projects in the second half, citing how they launched only P25 billion worth of projects in the first half of 2018 but went on to launch P138 billion for the entire year.

On the other hand, its mid-income and affordable housing brands both expanded in the period. Avida Land’s revenues surged 28% to P13.6 billion, while Amaia Land’s revenues increased by 19% to P3.7 billion.

Sales reservations, meanwhile, stood at P72.3 billion, driven mostly by local Filipino buyers who accounted for 70% of total buyers. Around 13% were overseas Filipinos, while the balance of 17% were other nationalities.

Unbooked revenues hit P147 billion, which will be recognized in the next three to four years based on the projects’ percentage of completion.

The commercial leasing business saw its revenues jump by 16% to P18.6 billion. Revenues from shopping centers went up 12% to P10.3 billion, on the back of an 11% same-mall revenue growth — thanks to the increased contribution of Ayala Malls Feliz, Circuit Makati and Capitol Central.

For office leasing, revenues were up by 25% to P4.6 billion due to the opening of new offices in Ayala North Exchange, Vertis North, and Circuit Makati. Hotels and resorts also contributed P3.7 billion, 17% higher year on year, following higher occupancies in Seda Ayala Center Cebu and its Palawan resort.

Meanwhile, ALI will be raising P5 billion from the issuance of bonds in the third quarter to finance its P130-billion capital expenditure for the year.

“We hope to launch and close it in September of this year. It will be priced at the five-year benchmark with an indicative credit spread of 40 to 50 basis points, so very tight pricing was given to us by China Bank Capital,” Mr. Bengzon said, referring to the underwriter of the deal.

Shares in ALI slumped 3.63% or P1.85 to close at P49.15 each at the stock exchange on Monday.