ALI sets up new unit to cater to OFWs

Property giant Ayala Land Inc. (ALI) has set up a new company to market its products to overseas Filipino workers (OFWs), a move seen to further expand sales coverage and boost profitability.

In a filing with securities regulators, ALI senior vice-president Jaime Ysmael said Ayala Land International Sales Inc. would contribute to the growth in sales volume by tapping the large overseas Filipino market.

Ysmael said ALI continues to pursue growth opportunities, including new products and projects in new geographic areas and markets. When completed, these projects are expected to significantly augment the company’s recurring revenue stream.

Among these new projects include the development of the 200,000-square meter North Triangle Commercial Center slated for completion by mid-2007; the expansion of Market! Market!; the Anvaya Cove in Morong, Bataan, a residential and beach resort community; and new residential subdivisions to cater to the middle-income market.

In addition, Ysmael said business process outsourcing offices PeopleSupport Center and Convergys will be operational within the year.

He said the company will also start the development of a property its first real estate venture in Sta. Cruz, Manila in partnership with Manila Jockey Club Inc. "This is our first real estate venture in the city of Manila and will enable us to reach the mass and middle income segments in the area,"

ALI more than doubled its net income in the first three months of the year, fuelled by brisker leasing and real estate revenues and sales of non-core assets. From a restated profit of P496 million in 2004, ALI’s net income jumped to P1.2 billion in the first quarter of this year.

Without the one-time gain, ALI’s net income would be at P600 million, up 21 percent from the restated year-ago profit. The company revised down its first quarter 2004 net income from P536 million after it adopted new accounting standards at the beginning of 2005.

Revenues surged 88 percent to P6.92 billion from P3.69 billion, boosted by the sale of its entire 15.8-percent interest in the Metro Rail Transit project, part of Manila’s rail network, to Goldman Sachs (Asia) Finance. ALI raised $65 million from the sale.

The sale was part of the company’s efforts to fortify its balance sheet to improve long-term profitability and value.

ALI had set aside P1.64 billion in provisions for a decline in the value of certain assets it intends to sell off and some asset write-offs.

Leasing revenues from shopping malls and office buildings – comprising 22 percent of total – hit P1.5 billion or 13 percent more than the previous level. Sales of industrial lots and residential properties, on the other hand, climbed 12 percent to P1.9 billion.

Hotels contributed P398 million in revenues, up five percent from the year-ago level due to higher room rates. Oakwood’s occupancy improved to 88 percent, higher than the Makati central business district’s hotels average of 80 percent. Hotel revenues accounted for six percent of total revenues.

Revenues from high-end residential units increased six percent to P483 million, 63 percent of which were from Serendra and The Residences at Greenbelt.

Middle-income residential revenues went up 88 percent to P381 million, accounting for five percent of total revenues.

Mass housing revenues, on the other hand, pumped in P403 million, 60 percent of which were derived from affordable product lines.

Service lines contributed P743 million in revenues or 11 percent of the total or a growth of 50 percent as against last year.

Meanwhile, construction and property management revenues derived by Makati Development Corp. and Ayala Property Management Corp. from third-party contracts accounted for P559 million.