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Ayala unit in Cebu reports higher profit

The fire that gutted Metro Ayala Department Store and Supermarket in January 2018 forced the Ayala Center Cebu mall to shut down for 12 days, resulting in lower profits and gross sales in 2018. (Ventures Cebu Photo)

A fire that gutted the Metro Ayala Department Store and Supermarket in January 2018 brought down the Ayala Center Cebu mall’s revenues and gross sales performance, but failed to make a dent in the 2018 financial performance of listed property firm Cebu Holdings, Inc. (CHI).

The Ayala Land, Inc, (ALI) subsidiary, which owns and manages the Cebu Business Park and Cebu IT Park, reported a 14% growth in net income to an all-time high of P857.1 million as of end-2018.

Consolidated revenues increased by 20% to P3.7 billion in 2018 from P3.1 billion in 2017, the company said in its annual report.

The same report showed that Ayala Center Cebu, which has been a consistent major contributor to the company’s revenues, saw its rental income go down by 4% to P1.3 billion as of end-December 2018.

Its overall gross sales performance of P7.6 billion in the same period was 32% lower than the yearago level.

“The mall closed for 12 days due to the fire incident at Metro Gaisano last January 5, 2018 which resulted to the decrease in sales,” the CHI annual report stated.

The lower revenue contribution from the mall was offset by proceeds from the sale of commercial lots at Seagrove Estate, a 14-hectare coastal leisure estate that is being developed in partnership with Taft Property Venture Development Corporation in Punta Engaño on Mactan Island.

Seagrove will be anchored by Holiday Inn Resort. The first phase of development is targeted for completion in 2020. It will consist of a boardwalk, support restaurants and shops, a portion of the lagoon, an events ground, and a pedestrian corridor.

Other major contributors in 2018 were the higher leasing income from office buildings, higher interest and other income and equity in net earnings from affiliates as well as sale of residential lots at Amara, and sale of condominium units and club shares.

There are currently 40 buildings in Cebu Business Park, with 10 ongoing constructions as of end-2018.

Also in 2018, CHI absorbed subsidiary Cebu Property Ventures and Development Corp. (CPVDC), developer of Cebu IT Park.

The merger was approved by the Securities and Exchange Commission (SEC) n November 2018, with CHI as the surviving entity.

CPVDC started in 1996 as a joint venture corporation between the Province of Cebu and ALI. It is currently engaged in real property ownership, marketing, management and development. (Ventures Cebu)

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