Ayala Land reduces spending for 2015
MANILA, Philippines – In a bid to rationalize its spending for land banking activities, Ayala Land Incorporated (ALI) has reduced the planned capital expenditures this year to about P80 billion ($1.72 billion) to P90 billion ($1.94 billion) from the initial target of P100 billion ($2.15 bilion).
“We want to rationalize spending because we want to keep out debts at certain levels. The rationalization will be mostly for land banking. We'll prioritize what we need and what we want,” ALI Chief Finance Officer Jaime Ysmael said in an interview at the sidelines of the Financial Executives CFO Forum on Thursday, September 17.
At the start of 2015, ALI said it has allotted P100 billion ($2.15 billion) in capital expenditures, of which P37.4 billion ($804.92 million) will be for residential development; P31.5 billion ($677.93 million) for land acquisition; and P14.7 billion ($316.37 million) for shopping malls.
The rest will be set aside for hotels and office projects.
As of end-June, ALI already spent P41 billion ($882.39 million) in capital expenditures.
Ysmael said incremental land banking will be less intense now compared to what happened in the last two years.
According to Ysmael, the property firm currently has 8,600 hectares in its land bank that is worth 10 to 15 years of development.
The reduction in capital spending, however, will not affect the planned launch of new projects.
ALI unveiled in November 2014 its new business plan that will boost the company’s net income to grow by 20% annually to as high as P40 billion ($861.04 million) by 2020.
ALI's 2020 Vision is based on expectations that the domestic economy will continue to post 6% gross domestic product growth, that interest and inflation rates will be stable, and that there will be a continued favorable mortgage lending environment.
Consumer spending, overseas remittances, strong revenues from business process outsourcing industry, and continuous increase in tourist arrivals also buoy ALI's growth prospects. – Rappler.com
$1 = P46.46