AyalaLand Logistics Q1 profit: P211-M (+18%)

AyalaLand Logistics [ALLHC 1.89, down 1.1%; 5% avgVol] [link] teased a Q1 net income of P211 million, up 18% y/y on what ALLHC refers to as a “solid recovery from the downturn experienced in 2023.” ALLHC said that industrial lot demand “remained steady”, generating P851 million in sales revenue, while warehouse leasing revenues jumped 15% to P175 million thanks to “higher overall occupancy”. ALLHC’s cold storage revenues reached P41 million, up 3%, and commercial leasing revenues reached P237 million thanks to “improved mall occupancies and rental rates.” ALLHC recorded P1.3 billion in comprehensive revenue in Q1/24 (+85%).

MB bottom-line: ALLHC has had a brutal two-year run, falling 72% from its January 2022 highs while signaling little in the way of strategy or creativity for ALLHC shareholders. Industrial lot sales are up, they’re down, then up again. Warehousing and cold storage continue to demonstrate growth and yet they’re basically footnotes compared to the big-ticket moves that ALLHC can book if it makes some meaty land sales. ALLHC is growing its logistics portfolio, and half of its press release was dedicated to outlining the growth that it expects to realize this year from its facilities in Cavite Technopark, Pampanga Technopark, Santo Tomas, and Mabalacat. I’d love for the opportunity to gain more direct exposure to ALLHC’s logistics business. Who cares about lot sales? Let those people baghold ALLHC. Imagine if the Ayala Group harnessed the tax benefits of the REIT structure to go on a buying spree and consolidate the private cold storage and warehousing industry in the Philippines. It’s hard to see given ALLHC’s current structure, but the possibility for the Ayala Group to take the lead in this sector still exists. Will we see bold moves here, or will the management group be content to mess about on the margins of this important industry?

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