In its bid to support the ambitious expansion plans of its core businesses in the Philippines, the Ayala Group of companies has set P185 billion ($4.1 billion) in capital expenditures, this year.
The businesses in which the Ayala Group wants to shore up its investments in include, real estate, telecom units, power generation, and transport infrastructure. The group’s listed holding firm Ayala Corp informed the stock exchange on Thursday..
Local realty Ayala Land Inc will get the highest amount of the capex at P100 billion ($2.25 billion) to bankroll its aggressive expansion program in line with its “2020 Vision” business plan.
The group is aims to achieve an average growth of 20 per cent annually with an end goal of reaching P40 billion ($902 million) in net income by 2020 from P11.7 billion ($264 million) in 2013.
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Also getting a large portion of Ayala Group’s capital spending is Globe Telecom Inc, which has programmed around P29 billion ($653.8 million) in 2015 primarily for data-related initiatives and LTE network infrastructure upgrades.
Globe’s total capital spending in 2015 is seen to hit at P37 billion ($834 million) in 2015, with P8 billion ($180.3 million) from its planned capital expenditures in 2014 sliding into the first half of this year largely due to timing issues.
“At the parent level, Ayala Corp will deploy P21 billion ($473.3 million) primarily to 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, Bank of the Philippine Islands, and Integrated Micro-Electronics,” the listed firm said in its statement.
According to Ayala Corp chairman and CEO Jaime Augusto Zobel de Ayala, the conglomerate switched to an aggressive growth strategy a few years ago and continues to undertake value enhancing opportunities in today’s sustained momentum of the local economy.
“Each of our business units are seizing investment opportunities within their individual spaces under this positive environment,” Ayala said. “In particular, we continue to strengthen our positions in power and transport infrastructure — two sectors that are presenting opportunities for investments with potential to become new growth platforms for Ayala.”
As proof of the robust business performance of its real estate, telecom and water units, Ayala registered a net income of P14.1 billion ($317.8 million) in the first nine months of 2014 — a 35 per cent growth from the previous year.
“We have seen robust growth in our earnings in the first three quarters of 2014 and we are optimistic that our fourth quarter growth will be at an even faster pace. We remain positive about the country’s overall macroeconomic environment this year as reflected in the aggressive capital spending we have planned out,” said Ayala Corp chief finance officer Delfin Gonzalez, Jr.
Ayala Corp is scheduled to release its full year financial and operating results next month.