PROFITS of Ayala Land, Inc. (ALI) dropped 41% to P4.3 billion in the first quarter, pulled by a slowdown in bookings and completions due to the Taal eruption in January and the enhanced community quarantine (ECQ) in March.

The listed property developer reported consolidated revenues of P28.4 billion in the January-to-March period, down 28% from a year ago. It was traced to lower revenues from both its property development and commercial leasing businesses, which fell 38% to P17.2 billion and 5% to P8.7 billion, respectively.

Property development sales declined due to lower project bookings and a drop in sales for projects in Southern Luzon after the Taal Volcano eruption. Residential revenues fell 39% to P13.8 billion while office sale revenues slumped 68% to P962 million. These outran the 8% increase in commercial and industrial lot sales to P2.5 billion.

Total sales reservations during the period dropped 27% to P24.6 billion. Four new projects worth P5 billion were launched, while the rest of the pipeline for the year are suspended to preserve cash.

ALI’s commercial leasing segment likewise slid due to the closure of malls and resorts in March in compliance with the ECQ to contain the coronavirus. Shopping center revenues decreased 9% to P4.6 billion and hotels and resorts revenues tumbled 17% to P1.6 billion, failing to offset the 15% increase in office leasing revenues to P2.5 billion.

Waived rent in malls stood at P2.6 billion as ALI’s 32-mall network has been closed since mid-March. Leasing revenues now mostly rely on offices, which are sustained by business process outsourcing tenants and headquarter buildings.

“The severe impact of the ECQ resulting from the COVID-19 crisis and the Taal eruption caused a major decline in our net income. Our development business was particularly hit hard during the quarter as we saw buyers opting to defer purchases during this period,” ALI President and Chief Executive Officer Bernard Vincent O. Dy said in a statement.

The pandemic pushed the company to cut its capital expenditures for the year by about 37% to P69.8 billion. Of this, P21.6 billion have been spent in the first quarter.

“Given the continuing market uncertainty, we quickly made adjustments in our plans to ensure the long-term sustainability of the business,” Mr. Dy said. He noted ALI expects the buildup of the local economy to take some time.

“We are confident, however, that once the business environment normalizes, our products and services will continue to be well positioned to benefit from the renewed growth of the Philippine Economy,” he said.

ALI has an application to conduct a real estate investment trust offering this year which would raise about P15 billion in net proceeds. It said this plan is still being pursued but the timing of the offering will depend on market conditions.

Shares in ALI at the stock exchange gained 65 centavos or 1.99% to P33.3 each on Monday. — Denise A. Valdez