Property giant Ayala Land Inc. reported Monday its net income for the first three months of the year fell 50 percent to P907 million from P1.83 billion in the same period a year ago, due to the absence of one-time gains as well as lower sales.

In a statement, Ayala Land said first-quarter consolidated revenues dropped 10 percent to P7.41 billion from P8.23 billion last year, when it generated P762 million from the sale of three subsidiaries, namely, Piedmont Property Ventures Inc., Stonehaven Land Inc. and Streamwood Property Inc.

Likewise, it said the absence of commercial lot sales in its Cebu Business Park this year led to the 60 percent drop in equity in net earnings of investees, interest, fees, investment and other income.

Ayala Land's consolidated net operating income (NOI) went down 14 percent to P1.88 billion as its overall NOI margin shrank to 27 percent from 31 percent on account of the residential and construction businesses.

The company said its mix of construction completion and new bookings during the first quarter was skewed towards vertical projects, which inherently carry lower margins compared to horizontal developments. Construction margins, meanwhile, were affected by an increase in the average cost of construction materials relative to the first quarter of 2008.

In terms of revenues per segment, gains from Ayala Land's leasing and landbanking businesses were offset by the decline in its support ventures and residential segment, which accounted for bulk of total revenues.

Residential revenues fell 11 percent to P3.13 billion, with the different housing brands posting mixed results. Upscale property arm Ayala Land Premier posted a 24 percent decline in revenues because of lower bookings while middle-income Avida Land registered a 4 percent increase, owing to the completion of some projects. Affordable housing division Alveo recorded a measly 1 percent drop.

Revenues from shopping centers rose by 6 percent to P1.10 billion while those from office buildings jumped 67 percent to P455 million.

The Strategic Landbank Management Group registered an 82 percent rise in first-quarter revenues to P542 million while Ayala Land's support business--including construction, property management and hotels--generated combined revenues of P1.88 billion, down 8 percent year-on-year.

"We had a challenging first quarter and while we expect the market to remain volatile, our financial condition remains strong as a result of efforts to maintain liquidity and boost our cash position," said Jaime Ysmael, Ayala Land chief financial officer.

During the first three months, Ayala Land spent a total of P3.5 billion for project and capital expenditures, 18 percent less than what it spent in the same months in 2008. The company earlier earmarked P17.4 billion for the full year 2009.