Land: Results of Operations

ABC Story: Eco-sensitive planning

ABC Story: Eco-sensitive planning
AboitizLand’s story in 2020 has been that of resilience and innovation. We weathered the harshest impact of the pandemic to the business by maintaining an agile, innovative mindset and staying attuned to the evolving needs of the market and our vecinos. This focus on innovation is the same spirit that will see us through as, together with #OneAboitiz, we recover from the COVID-19 crisis and bring AboitizLand to better heights in 2021 and beyond.
David L. Rafael Aboitiz Land, President and CEO

For AboitizLand and many other companies in all industries across the globe, 2020 was a year of disruptions. We began the year facing the challenges brought about by the eruption of Taal Volcano and managing its impact on LIMA, our integrated economic center located in LipaMalvar, Batangas, and its residential component, The Villages at Lipa.

The rest of the year would be riddled with more challenges, such as the series of typhoons, which battered and flooded the country in the last quarter of the year, with our developments in Batangas and Central Luzon along the storm path. But no calamity had a bigger and more damaging impact than the health and economic crisis brought about by the COVID-19 pandemic.

The enhanced community quarantine (ECQ), which began in March 2020 forced the lockdown of businesses across the country, severely impacting all aspects of AboitizLand’s operations. OFW remittances, long since one of the key drivers for the property industry, drastically dipped as thousands of overseas workers lost their jobs and had to be repatriated. Unemployed and out-of-business Filipinos struggled to make their loan payments, even after several rounds of moratoriums extended by businesses, and the impact was immediately felt, as our revenue collections took a dip. Overall consumer confidence was extremely low and the business outlook was bleak.

Metrics that Matter

0 Billion Consolidated Revenue coming from the residential business unit
0 Billion Booked sales, surpassing pre-pandemic performance
0 Leads Generated leads from digital marketing efforts, resulting to Php 735 million in sales
0 Sales Partners Empowered through our training programs on digital selling ensuring they have livelihood even during the pandemic
0 Homes Constructed and ready for vecinos to move in achieving 98% of house construction targets
0 homes Turned over to new vecinos despite pandemic restrictions
ABC Story: Eco-sensitive planning

MILESTONES

  • Contributed a consolidated revenue of PHP3.6 billion to AEV
  • Executed a quick pivot to digital-based selling early on in the pandemic, resulting to a strong post-ECQ rebound in reservations sales that was sustained until end of 2020
  • Embarked on a more focused and concentrated management of the residential business with the industrial and commercial business moving into Aboitiz InfraCapital’s portfolio
  • Advanced the organization’s digital transformation through digitization programs in major aspects of operations — in sales and marketing, construction, and collections
  • Completed construction of 357 homes even with operational restrictions caused by the pandemic.
  • Completed 160 house turnovers with a rate of 96% acceptance at first meeting, with the help of virtual meetings
  • Launched model houses in Ajoya Cabanatuan and Ajoya Capas and inaugurated sales offices for Seafront and The Villages at Lipa
ABC Story: Eco-sensitive planning

OUTLOOK

  • Achieve a positive bottom line in 2021 with double digit growth seen in revenue, gross profit, and net operating profit versus 2020, largely driven by stronger house completion from previous years and the robust sales generated in 2020
  • Provide capital for the Aboitiz Group through the monetization of landbank assets
  • De-risk the business by revisiting our inventory mix to ensure it is attuned to market demand
  • Expand our customer base in Luzon as we continue building a bustling community in Seafront Residences and start the turnover of houses to vecinos in Ajoya Cabanatuan and Ajoya Capas
  • Start reaping the rewards of our investments in digitization, through new systems that support sales and marketing, construction, and collections, which help us achieve operational excellence and provide better customer experience Continue to capitalize on opportunities to synergize with other Aboitiz business units, and collaborate with top property developers
  • Launched model houses in Ajoya Cabanatuan and Ajoya Capas and inaugurated sales offices for Seafront and The Villages at Lipa
ABC Story: Eco-sensitive planning

Managing the pandemic impact through a quick pivot to digitalization

As the rest of the country was reeling from the sudden halt of business, AboitizLand began mobilizing towards a quick pivot to innovative measures to ensure business continuity.

AboitizLand introduced its contactless homebuying service just a few weeks after the enhanced community quarantine was enforced in March. Sensing Filipinos’ urgent need for a good home to serve as a sanctuary for themselves and their family during the pandemic, we were one of the first developers to respond by taking our sales and marketing operations online and offering end-to-end, digital-based homebuying. From property viewing to unit reservation, we made the entire home acquisition process possible through our digital platforms.

Aside from providing our customers with safer options to conduct their home buying journey, we also made sure our sales force embraced the digital approach to selling through innovative tools, training programs, and incentives. As a result, we began to see our reservation sales levels recover and even exceed pre-pandemic levels in July of 2020. We were able to sustain the sales momentum towards the end of the year, posting 130% gross reservation sales versus budget, with our conversion-to-booked sales rate also surpassing expectations.

Similarly in construction, the series of community quarantines took a toll on our ability to construct and deliver houses to our vecinos on time. For a few critical weeks, operations completely halted as supply chain challenges also mounted.

As authorities began loosening their restrictions, we quickly adapted to the new normal through the strict implementation of the return-towork playbook, as we also ensured compliance with DOLE and DOH safety protocols as early as April 2020. We aggressively implemented plans to compensate for weeks of lost hours of operations by ramping up house awards through enhanced standard procurement procedures. The construction teams made full use of Agora, the internal digital communications tool in the Aboitiz Group, which became an effective platform to manage progress and performance in our project sites across Luzon and Cebu.

We also turned to digital platforms to ensure our targets for collections were met. The house turnovers were initially hampered by our vecinos’ inability to personally accept their units, whether through travel restrictions or due to concerns for their safety. We worked around these limitations by offering virtual house acceptance sessions. With a 96% acceptance rate at the first meeting, our new homeowners appreciated how we have turned a traditionally in-person milestone into a virtual, safe, and efficient experience for them.

Amidst continuously evolving and mounting operational limitations and low consumer confidence at a time of a raging pandemic, AboitizLand showed how an organization’s agile and innovative mindset is key to its survival and success in the face of challenges.

ABC Story: Eco-sensitive planning

A closer focus on the residential business

Agility and innovation played a hand in the strategic decision to integrate our industrial and commercial business units into Aboitiz InfraCapital in the third quarter of 2020. The move supports the Aboitiz Group’s vision of ramping up the growth of our integrated economic centers, while at the same time putting a more focused approach to the residential business.

Even in the face of an unprecedented health and economic crisis, the property market remains resilient, with the large unmet demand for housing as its main driver. It also continues to be highly competitive, as Filipinos grow more discerning about what they need and want for their homes. In addition, AboitizLand sits on approximately PHP4 billion in collectible value, as well as PHP24 billion worth of unlocked value in unlaunched inventories and landbank.

This renewed focus on the residential business enables us to deliver maximum value and growth, as we navigate the uncertain postpandemic market landscape. AboitizLand will continue to improve operational efficiency in constant pursuit to be a stronger residential developer brand.

ABC Story: Eco-sensitive planning

Shifting market preferences

Before the pandemic, people in the suburbs and provinces naturally flock to the major urban centers with their high concentration of career and business opportunities. However, COVID-19 has made these megacities highly vulnerable, as social distancing and health protocols brought to light an urgent need for better living spaces.

After a few months of complying with shelter-in-place protocols, Filipinos have developed a renewed appreciation for a good home. Property industry watchers reported a growing shift in homeseekers’ preferences towards houses and lots in next-wave cities, as bigger living areas, open spaces, and amenities take priority. Online modes of working, conducting business, and learning have made it possible to choose to live in locations far away from central business districts.

AboitizLand’s residential developments, located in emerging growth centers in Central Luzon, Batangas, and Cebu, are far enough from the congestion and noise of the metropolis yet close enough to be able to drive to the familiar sights and sounds of the city. Our master planned developments, boasting of less density and more open spaces and amenities also answer the market’s renewed need for developments that offer better work-life balance and access to creature comforts. In the third quarter of 2020, we ramped up our sales and marketing efforts in order to capitalize on these trends that are now favoring our developments, harnessing our digital tools and platforms to reach as many of our potential customers as possible.

As the real estate market moves into recovery, experts say these new property trends are here to stay. Buoyed by the government’s moves to decongest the city centers and funnel growth into the countryside, as well as the continued infrastructure developments connecting these centers with new-wave cities in the provinces, the outlook for AboitizLand’s properties is rosy. We have full confidence that our mission to create better ways to live through our thoughtfully planned communities is resonating more and more with an increasingly discerning market.

ABC Story: Eco-sensitive planning

A bullish outlook for 2021 and beyond

Though 2021 still presents as much uncertainty as the past year, AboitizLand enters its next 25 years with a hopeful outlook and a clear path forward. In 2021, we expect to post a 203% increase in bottomline, with double digit growth anticipated in revenue, gross profit, and net operating profit versus last year. This will be largely driven by stronger house completion from previous years and the robust sales generated in 2020.

We also look to contributing capital to the Aboitiz Group by spearheading the monetization of its land assets.

Operational excellence will be a major focus for 2021, as we embark on a strategic shift in our culture in critical areas. AboitizLand will continue to sharpen its results-driven culture. This involves the organization-wide ownership of wildly important business critical goals, and creating a cadence of accountability focused on rapid and sharp execution of goals. It is a culture of performance and execution that thrives on helping each other succeed.

We plan to put a renewed focus on our customers and continue to embark on our digital transformation journey, a major goal of which is to enhance the customer experience. Our process and technological changes are all focused on meeting and exceeding customer expectations.

We look ahead to fostering stronger organizational cohesion as we adapt an agile work system. Our team members will be able to work from anywhere, have a strong mentorship program to support their growth, and engage in meaningful creation of communities that nurture families and the environment. We will take the lessons of 2020, and continue our digital transformation journey which will significantly enhance our efficiencies in the major areas of sales and marketing, construction, and collections.

We will maintain a de-risking approach by continuously revisiting our inventory mix and ensuring it is attuned to market demand. From the onset of project planning, our sites and lot cuts are made flexible so that our product mix and portfolio remain diverse and responsive to market needs. As a result, target velocity is achieved or even exceeded, margins are protected, and capital risk is reduced.

With renewed focus, and with the spirit of innovation buoying forward a cohesive AboitizLand team, we look ahead to fulfilling our promise of creating better ways to live for more Filipino families.

ABC Story: Eco-sensitive planning

ABC Story

Eco-sensitive Planning

Guided by our vision of creating better ways to live, AboitizLand believes that nature and its inhabitants must be protected to promote good quality of life for all. In our third year of partnership with Aboitiz Foundation, the Department of Environmental and Natural Resources (DENR) and the University of the Philippines Diliman Institute of Environmental Science and Meteorology, we continue to work on the Pawikan Conservation Project, a five-year management plan to preserve sea turtle nesting sites at Seafront Residences in Barangay Calubcub II, San Juan, Batangas.