In 2018, Even Ayala Land Had a Less Than Stellar Year

Last time we looked at Ayala Land, its Installment Contract Receivables (ICRs) problem had gotten worse and not better.

In 2018, things are looking better - much better. A lot of its ICRs were sold off to affiliates like BPI Family Bank and the overall level of ICRs have gone down substantially.

But credit quality remains a problem.

As a percentage of the remaining ICRs, total past due and impaired ICRs has not changed much.

Ayala Land's Real Estate Receivables Problem Has Gotten Worse, Not Better

The Philippine Real Estate Bubble Has Also Burst For... Ayala Land!

The (Un)Steady State of Philippine Real Estate in 2016

At 109.77%, 8990 Holdings still has the most Real Estate Receivables relative to its Stockholder's Equity in 2016. Next is Century Properties at 70.49% of Stockholder's Equity, followed by Ayala Land at 46.92% of Stockholder's Equity.

Naturally, 8990 Holdings still has the most problematic Real Estate Receivables. Problem Real Estate Receivables amount to 11.10% of its Stockholder's Equity as of 2016. Believe it or not, this figure is way down from the 20.40% it posted in 2015.  Ayala Land's Problem Real Estate Receivables amount to 6.72% of its Stockholder's Equity in 2016. Neck and neck for third place are SM Prime Holdings and SM Investments with Problem Real Estate Receivables amounting to 3.68% and 3.61% of their respective Stockholder's Equity.

 SM Prime Holdings also holds the dubious distinction of having the highest percentage of Past Due But Not Impaired Real Estate Receivables relative to Total Real Estate Receivables in 2016. This is closely followed by Ayala Land with 14.63% of its Real Estate Receivables in Past Due status. Both Vista Land and 8990 Holdings have similar ratios with 9.58% (Vista Land) and 9.44% (8990 Holdings) of its Real Estate Receivables falling Past Due in 2016.

Related Posts:

Ayala Land's Real Estate Receivables Problem Has Gotten Worse, Not Better

8990 Holdings Inc.'s 2016 Annual Report: What a Difference an Auditor Makes!

8990 Holdings Inc.'s Impaired Installment Contracts Receivable (ICRs): The Pig Has Finally Broken Out of the Python!

The Philippine Real Estate Bubble Has Also Burst For... Ayala Land!

The Philippine Real Estate Bubble Has Also Burst for Vista Land

The Philippine Real Estate Bubble Has Already Burst for HOUSE (8990 Holdings, Inc.)

Ayala Land's Real Estate Receivables Problem Has Gotten Worse, Not Better

At around this time last year, in a blog post entitled "The Philippine Real Estate Bubble Has Also Burst For... Ayala Land!", we wrote about how the company's past due installment contract receivables (ICRs) for real estate have quadrupled in 2015 from Php 1.95 billion in 2014 to Php 8.80 billion in 2015. Much of the past due ICRs were severely past due - over 120 days past due.

Total past due ICRs comprised as much as 13.4% of the entire Real Estate ICR portfolio in 2015.

Today, that figure is even higher. As of year-end 2016, 14.63% of Real Estate ICRs are now past due. More than one in seven Real Estate ICRs is now past due.

The credit quality has gotten worse, not better.

The amount of severely past due Real Estate ICRs (over 120 days past due) has grown by almost 80% in just one year, from Php 3.58 billion in 2015 to Php 6.43 billion in 2016.

Real Estate ICRs over 120 days past due now comprise 8.11% of total Real Estate ICRs in 2016.

Past Due But Not Impaired Real Estate ICRs now comprise 6.72% of the company's Stockholder's Equity as of 2016, up from 5.88% in 2015 and more than four times the 1.60% level the company posted in 2014.

Despite this, the company's Impaired Real Estate ICRs have dwindled to zero in 2016. Around Php 9.55 million of Impaired ICRs, which have been impaired since at least 2012, were written off in 2016.

Sooner or later, the company will have to recognize these past due Real Estate ICRs as impaired and the impairments will have to be written off... someday. We just don't know when. But if Ayala Land, one of the country's most prestigious and largest real estate companies, cannot handle its growing Real Estate ICR problem amid a booming economy, this does not bode well for the rest of the industry.

Source: Ayala Land's 2016 Annual Report

Related Posts: The Philippine Real Estate Bubble Has Also Burst For... Ayala Land!

The Philippine Real Estate Bubble Has Also Burst For... Ayala Land!

It seems like that the real estate bubble has also burst for one of the biggest and most prestigious real estate developers in the country: Ayala Land or ALI for short.

Although Installment Contract Receivables (ICRs) in absolute terms looks fine and dandy, there is a very discernable quadrupling of its Past Due but Not Impaired Installment Contract Receivables in 2015.

A closer look shows that a big jump in past due ICRs took place in the past due ICRs that are less than 30 days old and over 120 days old.

The jump in past due ICRs becomes clearer when viewed in relative terms.

So past due ICRs and Impaired ICRs now comprise a striking 13.4% of the entire ICR portfolio.

If all the past due ICRs go bad, it will take away a nice chunk (5.88%) of ALI's Stockholder's Equity.

 Although Past Due ICRs have been rapidly going up, Impaired ICRs have remained static at Php 9.55 million and have represented a declining share of Total ICRs.  As the Past Due ICRs age further and become even more unrecoverable, Impaired ICRs have only one place to go: up!

Source: Ayala Land 2015 Annual Report