Ayala Corporation earmarks P185B for capex in 2015
MANILA, Philippines – One of the country’s largest conglomerates, Ayala Corporation, is earmarking P185 billion ($4.17 billion) for capital expenditure (capex) in 2015.
In a disclosure to the stock exchange, Ayala said it is eyeing the expansion of its property and telecommunications businesses. The conglomerate will also continue to ramp up its investments in power generation and transport infrastructure.
Its property unit, Ayala Land Incorporated, is alloting P100 billion ($2.25 billion) in capex for the year.
Ayala Land is aiming to launch more residential, office, hotel, and commercial center projects, and land acquisitions for future development, to achieve its target P40-billion ($900.90 million) net income by 2020.
The group’s telecommunications business through Globe Telecom Incorporated has also set aside P37 billion ($833.33 million) in 2015, including the P8 billion ($180.24 million) unspent budget in the second half of 2014.
Globe’s capital spending for this year will primarily be used for data-related initiatives and LTE network infrastructure upgrades, Ayala said.
Ramping up investments
At the parent level, Ayala will deploy P21 billion ($473.09 million) to primarily support investment programs in power generation and transport infrastructure.
The rest of the amount will be deployed to fund the growth initiatives of the other business units, including Manila Water Company, Incorporated, Bank of the Philippine Islands, and Integrated Micro-Electronics, Incorporated.
Ayala started an aggressive growth strategy a few years back and it continues to undertake value enhancing opportunities amid this sustained momentum in the Philippine economy, Ayala Corporation Chairman and Chief Executive Officer Jaime Augusto Zobel De Ayala said.
“Each of our business units are seizing investment opportunities within their individual spaces under this positive environment,” Zobel De Ayala said.
He also pointed out that Ayala is continuing to strengthen its positions in power and transport infrastructure – two sectors that are presenting opportunities for investments with potential to become new growth platforms for the conglomerate.
Zobel De Ayala pointed out in his presentation at the symposium on the Asia-Pacific Economic Cooperation (APEC) 2015 Priorities at the APEC-Informal Senior Officials’ Meeting (APEC-ISOM) in December that for the Asia-Pacific sustain its strong growth momentum averaging at 6% annually and outpacing the rest of the world, the region must continue investing in necessary physical and human capital.
He added that the region is experiencing a significant infrastructure backlog. (READ: JAZA: Fill Asia-Pacific infra gap to sustain growth momentum)
For the first 9 months of 2014, Ayala registered a net income of P14.1 billion ($317.65 million), a 35% growth from 2013, mainly driven by the robust performance of its real estate, telecommunications, and water units.
“We have seen robust growth in our earnings in the first 3 quarters of 2014 and we are optimistic that our fourth quarter growth will be at an even faster pace,” Ayala Corporation chief finance officer Delfin Gonzalez Jr said.
The conglomerate remains positive about the country’s overall macroeconomic environment this year as reflected in the aggressive capital spending it has planned out, Delfin added.
Ayala will release its full year financial and operating results in March. – Rappler.com
US$1 = P44.39
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