Ayala Land Adr

Good afternoon, everyone. Thank you for joining us today and welcome to Ayala Land's full year 2025 briefing. Let me begin by introducing our panel. Me and Dee, President and CEO, Jed Kimpo, CFO and Treasurer, Mike Hugo, Head of the Premium Residential Business Group, Arianna Zabel de Ayala, Group Head for Leasing and Hospitality. We're also joined today by members of our Management Committee. Robert Lau, Head of Strategic Growth, New Ventures, and Central Land Acquisition. Darwin Salipsip, Group Head of Construction Management. Raquel Cruz, Head of the Core Residential Business Group. And Isa Sagun, Chief Human Resource Officer. We'd like to acknowledge the presence of our broader management team. Please note that the press release and presentation materials are available on our Investor Relations website. For any questions that we may not be able to address during the briefing, we will respond via email at the soonest possible time. At this point, I'd like to turn it over to our CFO, Chad Kimpo, for his presentation.

Thanks, Joe. Again, good afternoon to everyone, and thank you for joining us this afternoon for our full year 2025 analyst briefing. Allow me to present the key highlights of our 2025 financial and operating results, and then I will give the floor to our CEO. We are pleased to report that Ayala Land delivered total revenues of 190.2 billion, up 5% versus prior year, and net income of 39.1 billion, up 39% versus prior year. Excluding gain from our sale of our 50% stake in Alabang Commercial Corporation and what we call as core revenues, Core revenues amounted to $178.9 billion, just 1% below prior year, and core net income reached $30.6 billion, up 8% versus prior year. We invested in capital expenditures totaling $92.9 billion, up 10% versus prior year, with notable increase in our leasing and hospitality asset investments. Our balance sheet remains strong, with net gearing ending at 0.78 is to 1 within our guardrails on leverage. On portfolio segment revenues, despite market headwinds, property development revenues reached 113.9 billion, plus 1% versus prior year, following strong bookings of estate lots and offices for sale, offsetting lower residential revenues. Leasing and hospitality revenues reached 48.7 billion, plus 7%, driven by broad-based growth across all our segments, this despite ongoing renovations in key malls and hotels. Service revenues was down to 11.8 billion, minus 34%, as a result of lower third-party contracts of our construction business and the absence of airline revenues, which we sold late 2024. Interest and other income was up 15.8 billion, primarily driven by gains from the sale of our stake in Alabang Commercial Corporation, amounting to over 11 billion. On our income statement, First, as mentioned, total revenues reached 190.2 billion plus 5% versus prior year. This is on the back of number one, real estate revenues reaching 174.5 billion, just slightly lower versus prior year, as we saw stable property development revenues, improving leasing and hospitality revenues, but tempered by lower service revenues. Our interest and other income was up 275%, primarily driven by the sale of Alabang Commercial Corporation. Total expenses reached 134.1 billion, down 3%. We registered lower real estate expenses, 104 billion, down 7%. driven by the revenue mix, wherein there was an increase in sales of estate lots, an increase in share of leasing business in our overall mix, and the absence of airline expenses. General and administrative expenses amounted to 10 billion, up 9%, and we registered a GAE ratio versus core revenues of 6%. Interest expense, financing, and other charges amounted to 20.1 billion, primarily driven by two factors. First, increase in total borrowing and increase in cost of debt. And number two, in 2024, we reversed provisions previously made for airline operations following its sale late 2024. Earnings before income tax came in at 56.1 billion, registering EBIT margin of 40%, and on a core EBIT margin basis, 36%, 300 basis points better versus prior year. Provision for income tax was at 10.5 billion, with an effective tax rate similar to that of prior year. Non-controlling interest increased by 7% to 6.4 billion, mainly due to the higher net income of AREIT attributable to its own public shareholders. Consolidated net income climbed to 39.1 billion. Excluding the gain from the sale of Alabang Commercial Center, corn yet grew by 8% to 30.6 billion, just shy of the 2 times 2025 GDP growth. Turning to our detailed revenue breakdown. Property development was stable at 113.9 billion despite market headwinds. Residential revenues hit 91.4 billion, slightly lower by 4% versus prior year on strong core residential bookings, partially offsetting weakness in the premium residential bookings. Estate lots rose to 17.7 billion, up 21% on strong bookings from Circuit Makati Arca South in Tagib and Centrala in Pampanga. Office for sale increased to $4.8 billion, up 40% on robust new bookings at One Virtus Plaza in Quezon City and the Gentry Corporate Plaza in Makati. On leasing and hospitality, broad base growth across the entire portfolio, delivering revenues of 48.7 billion. Despite ongoing reinventions in our flagship malls, shopping center revenues reached 24.2 billion, 5% up versus prior year due to higher occupancy, lease rates, and merchant sales. Offices reached 12.2 billion, 5% higher on stable occupancy and higher average portfolio rental rates. On hospitality, it climbed to 10.6 billion, up 9% on higher room rates and new capacity following our purchase of New World. Again, this despite renovations in key hotel assets for most of 2025. Industrials jumped to 1.7 billion, up 37% versus prior year, on the contribution of industrial land which we housed in Erit and new cold storage facilities. Services was 34% lower year-on-year at 11.8 billion. Construction stood at 8.9 billion, 31% lower versus prior year, following our completion of third-party data center project in 2024. Property management and others dipped 42% to 2.9 billion due to the absence of airline revenues. Property management by itself was stable delivering 1.9 billion. In terms of margins, most of our product gross margins and EBITDA margins are within our targets. For the property development business, residential business registered 47% for horizontal products and 41% for vertical products. Estate lots came in at 55%, primarily as a result of the product mix, and office for sale was steady at 48%. On our leasing and hospitality business, shopping centers delivered stable 64% EBITDA margin. Offices was likewise stable at 89%. Hospitality was at 22%, which we expect to improve with renovated room capacity now back online, which we brought back in 4Q 2025. Dry warehouses was stable at 78%. Cold storage was at 23%, which we similarly expect to trend up as we stabilize new capacity that we brought in. Services, which is composed of construction and property management, are at 5% well within our expectation. Next, let me walk you through the operating performance highlights of our businesses, starting with property development. Total sales across our property development portfolio amounted to 142.3 billion, basically flat versus prior year. Premium sales was slightly down at 3%, again this despite market headwinds. Core was up 1% on our focus sales effort to move our inventory and stay ahead of the industry. Estate lots delivered 17.1 billion in sales, up 16%, as we saw robust interest in our various commercial, industrial, and leisure lots. We launched a total of 60.4 billion projects in 2025, notably 40% lower versus prior year, in line with our continued focus of capital efficiency. Deep diving on the residential products, Residential sales was sustained at 125.2 billion, just 1% down versus prior year. By segment, our premium generated nearly 80 billion in sales at 78.6 billion. Our core market delivered positive year-on-year growth at 46.6 billion. On an overall basis, our residential revenue as of end 2025 stood at 19 months, better than the 22 months as of end 2024. By product type, vertical sales was resilient at 82.3 billion, up 2% year-on-year, anchored by Lorien. Horizontal sales declined by 7% to 42.9 billion, as we saw buyers look at our estate lots as an alternative. We launched a total of 46.6 billion in residential products last year. Again, notably 42% lower versus prior year, as we focus ourselves on selling existing inventory. Almost three-quarters of our buyers are local Filipinos, and on a year-on-year basis was flat. Sales to overseas Filipinos stood at 17%, which declined by 4% to 20.7 billion, and sales to other nationalities was lowered by 7% to 12.8 billion, primarily attributable to sentiment headwinds, our tighter terms, and our shift to more premium segment products. Moving on to the op stats of our leasing and hospitality business. First, on shopping centers. We managed a total gross leaseable area of 2.2 million square meters in 2025, and opened 29,000 square meters of gross leaseable area during that year, with additional space in Ayala Malls, Vermosa, and the opening of new malls in Evo City and Park Triangle. Lease-out was 1% higher year-on-year at 91%. We have a rolling pipeline of over 800,000 square meters of new mall space, 86% will be within our existing and our future estates. For 2026 alone, we will open over 200,000 in GLA, our largest annual incremental GLA to date. This includes new malls at Arca South, Gatewalk in Cebu, and additional leasable area in Park Triangle, Trinoma, New Valley, Evo City, and Greenbelt. On offices, Our total GLA stood at 1.5 million square meters, and we opened 48,000 square meters with new assets in New Valley, in Atria, in Iloilo. Portfolio average lease-out is at 87%, 4% lower versus prior year, following completion of new facilities. Lease rate is up 2%, despite continuing elevated supply in the market. Our five-year expansion pipeline is over 300,000 square meters. most of which will be concentrated in our key estates in Makati, BGC, Virtus North, and Cebu. On hospitality, we ended the year with 4,658 rooms, with net additional rooms of close to 400, primarily driven by the acquisition of New World last year. Hotel occupancy improved to 68%, plus 1% versus prior year, and resorts occupancy was stable at 42%. Our updated pipeline involves the following. We look to open Mandarin Hotel this year, bringing in an additional 276 rooms, and in the next five years, build out and deliver over 1,500 additional keys. Finally, on our industrial real estate business, We ended the year with dry warehouse portfolio with 380,000 square meters and cold storage pallet positions of 31,500. This boosted by acquisitions that we made in 2025. Our lease out on a dry warehouse is at 85% following the addition of new capacity. On cold storage, it improved to 80% with new clients, sign-ups, and robust demand from clients. We are looking to double our cold storage capacity in the next few years and have likewise secured sites for potential built-to-suit dry warehouses to expand our portfolio. For this year, 2026, we are opening an additional 9,000 pallet positions of new cold storage capacity at Artico Consolacion in Cebu City. As mentioned, we invested a total of 92.9 billion in CAPEX, 10% higher versus prior year. Leasing and hospitality was a major driver, doubling investment to 27.1 billion and accounting for just under 30% of our total spend. Of this total spend for leasing and hospitality, three quarters of which went to expansion CAPEX and one quarter to reinvention initiatives. CAPEX for residential was 38% of total, primarily focusing on build-out of projects for delivery. Estates investments comprised 18% of total CAPEX and the balance of 15% were for continuing land acquisition commitments. Our debt position continues to be well-managed, with 90% contracted into long-tenors. Total gross debt as of end December 2025 stood at $318 billion, up 13% versus prior year. We have kept our average maturity stable at 4.8 years. Our average borrowing cost was slightly up, ending at 5.5%. A bit over 70% of our debt is on a fixed basis, and just under 30% is on a floating basis, and of the floating component, almost a third of that has an option to convert to fixed. Our balance sheet remains strong, with net gearing ratio of 0.78 is to 1. Cash and cash equivalents stood at $19 billion. Our stockholders' equity grew by 7% to P385 billion. Our current ratio is at 1.59 is to 1. And our interest coverage ratio, just looking at core earnings, is healthy at 4.9 times. To summarize, Ayala Land delivered total revenues of P190.2 billion and net income of P39.1 billion. Excluding gain from the sale of our 50% stake in Alabang Commercial Center, core revenues registered 178.9 billion and core net income reached 30.6 billion, up 8% versus prior year. Thank you.

Thank you, Chad. We'll pass it on to our CEO for her message.