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Stock Commentary

AyalaLand Logistics board votes to raise authorized capital stock to fund growth plans

Merkado Barkada
AyalaLand Logistics board votes to raise authorized capital stock to fund growth plans
AC knows that, which makes me think that we’ll see a consolidation of AC’s warehouse and cold storage assets soon; if we do, I expect that this capital raise will be a pretty big component of what comes next for AC’s actual logistics interests.
Merkado Barkada

The Ayala-led land and logistics holding company disclosed that its board voted in favor of increasing ALLHC’s authorized capital stock from P7.5 billion to P17.5 billion, with the additional ?10 billion split equality between new preferred shares and new common shares.

AyalaLand Logistics [ALLHC 4.84 5.68%] said that these new shares would serve as an alternative funding source “given its expansion plans and growth aspirations”.

In unrelated (but quite related) news, ALLHC also disclosed yesterday that its FY21 income was up 11%, that it “gained momentum with the reopening of the economy”, and “continues to show signs of recovery”.

ALLHC gave revenue totals for its three business segments, industrial lot sales, warehouse operations, and commercial leasing.

For industrial lot sales, ALLHC booked P2.05 billion in sales, which was up 62% over 2020.

For warehouse operations, ALLHC booked P0.40 billion in revenue, up 16% over 2020. ALLHC booked P0.42 billion in commercial leasing revenue, which was actually down 20% as compared to 2020, due to 2021’s COVID movement restrictions.

MB BOTTOM-LINE

If you ever needed proof that ALLHC is (so far) a non-factor in the “real” logistics market, look no further than this report.

Out of the P2.87 billion in revenue that they reported, 72% of it comes from just selling industrial land from its inventory of industrial land.

Logistics-related operations through the warehouse and the new cold storage facilities that ALLHC acquired, accounted for just 14% of total revenues.

I say “so far” because it seems like the Ayala Group has been preparing to make real moves in the logistics space for the past couple of years; they’ve been acquiring warehouses and cold storages through ALLHC, and they’ve been reorganizing business units under Ayala Corp [AC 860.00] to include a new top-level business unit, AC Logistics.

There has also been a not-insignificant amount of noise about a potential logistics REIT from the Ayala Group, though when you put all these data points together it’s still kind of difficult to discern AC’s overall strategy in the logistics market.

Their strategy in the “selling industrial plots of land for profit” strategy is great, and one that will pay off handsomely for many years to come, but that’s not logistics.

AC knows that, which makes me think that we’ll see a consolidation of AC’s warehouse and cold storage assets soon; if we do, I expect that this capital raise will be a pretty big component of what comes next for AC’s actual logistics interests.

All of the real movers and shakers in the logistics industry are privately-owned, and they’re looking at the same economic forecasts and demographic data that has the Ayala Group so interested in the sector.

I don’t think this space is in the “deal zone” yet, but these moves from ALLHC, and the potential deals that could result, could accelerate the growth and maturity of our domestic logistics industry.  

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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.

AYALA CORP

AYALALAND LOGISTICS HOLDINGS CORP.

PHILIPPINE STOCK EXCHANGE

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