Ayala Land cuts 2026 capex as Q1 profit drops

AYALA LAND, Inc. (ALI) reported a 21.74% drop in first-quarter net income to P5.4 billion and said it will scale back its 2026 capital expenditures (capex) to about P50 billion from an earlier P70-billion to P80-billion plan amid shifting market conditions.

Revenues fell by 13.99% to P37.5 billion from P43.6 billion a year earlier, as weaker performance in the property development segment weighed on results, the company said in a disclosure on Thursday.

Property development revenues declined to P20.3 billion from P27.8 billion, reflecting softer demand and cautious buyer sentiment in the residential market.

Leasing and hospitality operations partly offset the decline. Revenues from these segments rose 9% to P12.6 billion, supported by improved occupancy, higher tenant sales, and contributions from newly opened and redeveloped assets, the company said.

Mall revenues reached P5.8 billion, driven by higher foot traffic and the launch of Ayala Malls Arca South, which added 17,500 square meters of gross leasable area.

Hospitality revenues increased 30% to P3.4 billion, supported by new capacity at New World Makati Hotel and improved performance from renovated Seda and Holiday Inn properties, as well as Lagen Resort in El Nido.

Office leasing revenues were steady at P3 billion, with occupancy levels above industry averages, according to the company.

The industrial estate segment posted P439 million in revenues, up 23%, driven by higher utilization of warehouse and cold storage facilities.

Sales reservations totaled P28.2 billion in the quarter, averaging P9.4 billion per month. Residential sales reached P24.4 billion, unchanged from the previous quarter, with demand coming from premium, core, and estate lot segments.

The company said it will adopt a more selective approach to new project launches and focus on priority developments while continuing to deliver ongoing projects.

“The current environment requires a more deliberate approach to how we deploy capital and manage our pipeline,” ALI President and Chief Executive Officer Anna Ma. Margarita Bautista-Dy said in a statement.

“We are actively reshaping our portfolio — scaling recurring income, delivering our existing projects, and positioning the business to emerge stronger and more balanced through the cycle,” she added.

ALI plans to deliver about 13,000 residential units across 40 projects this year as it prioritizes existing inventory.

“Our strategy for 2026 is clear: to expand our leasing and hospitality platform, maintain stability in property development, and preserve the balance sheet strength,” Ms. Dy said.

The company reported a net gearing ratio of 0.81:1 and an interest coverage ratio of 4.6 times, indicating stable leverage and debt servicing capacity.

ALI said it is expanding its recurring income base, with plans to add more than 270,000 square meters of mall and office space and reopen the Mandarin Hotel as part of efforts to build a more balanced portfolio.

Capital expenditures for the first quarter reached P23 billion, up 11% from a year earlier. Spending on leasing assets rose 53% to P6.1 billion due to expansion and redevelopment.

At the local bourse on Thursday, ALI shares fell 4.19% to P15.10 each. — Alexandria Grace C. Magno