PROPERTY giant Ayala Land Inc. (ALI) expects its actual 2015 spending to fall short of the P100-billion allotment, citing slower land bank accumulation.
ALI Senior Vice President Jaime Ysmael told reporters at the sidelines of the Financial Executives (Finex) Forum on Thursday that the company is “rationalizing” its costs for the rest of the year, particularly land bank accumulation, which can lower its total spending for 2015.
“It will be lower than a hundred. It’s about P80 to 90 billion range,” Ysmael said.
“We just want to prioritize. We want to make sure we tie down our actual spending because we want to keep our debt at a certain level . . . more on rationalization of spending, especially land acquisitions,” he added.
Ysmael said ALI will slow down on land acquisitions in view of it 8,600-hectare land bank which was accumulated in the last two years.
“We have actually increased the land bank already significantly in the last two years. Incremental land banking will be less intense now —compared to what happened in the last two years—is already big enough,” he said.
The development of most of the 8,600-hectare land bank will be pushed back for the long-term, Ysmael said, noting that ALI will keep it for “long-term value appreciation” where its leasing products like offices and hotels will be developed.
“We’ll first look at the likely scenarios in terms of land banking. But for now, we’re more on the tighter cash management,” Ysmael said.
In the first half of the year, ALI’s net income climbed by 19 percent to P8.4 billion from a year earlier. Ysmael said the second semester performance would likely be consistent with the first half results, mostly from the strong take-up of newly-launched projects.
The firm is “on track” with its 2020-40 plan, which involves growing ALI’s profits by 20 percent a year to P40 billion by 2020 from P11.7 billion in 2013.