Business World Online
Posted on May 23, 2013 10:52:51 PM
By Claire-Ann M. C. Feliciano, ReporterLISTED Aboitiz Power Corp., the power unit of conglomerate Aboitiz Equity Ventures, Inc. (AEV), plans to spend around P125 billion in the next five years for projects across the country, its top official said yesterday.
THE FIVE-YEAR investment plan includes raising the capacity of the 735-megawatt coal-fired power plant in Pagbilao, Quezon. -- www.aboitiz.com
The official said that as of end-2012, AboitizPower had 2,353 MW in total capacity.
Mr. Aboitiz said the investment will be used for its equity share in Redondo Peninsula Energy, Inc. (RP Energy); expansion of the 735-MW coal-fired power plant in Pagbilao, Quezon; its planned coal plant in Cebu; the 300-MW coal plant of Therma South Inc. (TSI) in Davao; and some new hydropower projects.
“This includes our projects in Luzon: the 600-MW plant of RP Energy and the Pagbilao expansion which is 400 MW,” he said.
AboitizPower holds a 25% stake in RP Energy which is the proponent of a 600-MW coal-fired power plant in Subic, Zambales. The facility is expected to contribute capacity to the grid by 2016. Other stakeholders are Manila Electric Co. and Taiwan Cogeneration Corp.
The company, through its subsidiary Therma Luzon, Inc., also operates the Pagbilao plant under an independent power producer administrator contract from the Power Sector Assets and Liabilities Management Corp.
“In Mindanao, we are building a TSI power plant that should be completed by the first quarter of 2015. We also have close to 150 MW or so of small run-of-river hydropower plants that we are developing in Luzon, Visayas and Mindanao,” Mr. Aboitiz added.
He said the company will also push through with plans to develop a 300-MW coal-fired power plant in the Visayas. “We are developing a 300-MW coal plant in Cebu, which is currently undergoing studies. We are making sure that the site we have pinpointed is the right site,” Mr. Aboitiz said.
Last February, Mr. Aboitiz said that the company will invest around P85 billion for its power projects. He explained that the Cebu power plant was not included in the initial investment.
“The P85 billion did not include the Cebu plant. So over the next five years, we are also developing that so our investment will be about P125 billion,” he said.
“It is envisioned to be a 300-MW plant. So… we are talking about $750 million to build the plant,” Mr. Aboitiz said.
He said the company hopes to start construction of the Cebu plant in the fourth quarter, adding that “this should come online, possibly, in the end of 2016.”
Asked on financing, Mr. Aboitiz said: “The P125 billion will be from equity and loans. Normally we do 25-35% equity and the balance will be from loan financing,” he said.
In the same briefing, a top official of AEV banking arm Union Bank of the Philippines said it expects a 10-15% profit growth this year.
“We are usually looking at a 10-15% per annum rise in our net income for the bank,” said Justo A. Ortiz, UnionBank chairman and chief executive officer and AEV director.
UnionBank booked a net income of P7.59 billion last year, compared to P6.59 billion in 2011.
Asked on updates on the bank’s recent takeover of Cebu-based thrift bank City Savings Bank, Inc., Mr. Ortiz replied: “Integration of that is going smoothly.”
“We are now working on how they [UnionBank] can leverage on the existing branch network of City Savings Bank, especially that 60% of its market is in Luzon. Their branches cannot be co-located with UnionBank’s branches,” he added.
UnionBank’s purchase of City Savings consolidates AEV’s financial services portfolio, while allowing UnionBank to strengthen its retail banking business as City Savings is focused on extending loans to school teachers under the Department of Education’s Automatic Payroll Deduction System.
Also in the same briefing, the top official of Aboitiz Land Inc. disclosed plans of expanding outside Cebu. “For now, we’re Cebu-based, but we’re looking at expanding outside Cebu,” said Andoni F. Aboitiz, AboitizLand president and chief executive officer.
Asked on the areas or partners that the company is looking at, he said:
“We haven’t come to conclusion yet. On the partners -- we don’t have a specific way for that yet.”
He added that he hopes to make AboitizLand “a major contributor to the Aboitiz Group.”
“But we still have a long way to go,” Mr. Aboitiz said.
AEV’s net income rose 10.36% to P8.019 billion in the first quarter from P7.266 billion in the same three months last year. In the same comparative periods, net income of AboitizPower declined by 17.82% to P4.691 billion from P5.708 billion, while that of UnionBank surged 40.79% to P4.002 billion from P2.843 billion.
Yesterday, shares of AEV lost 20 centavos or 0.35% to P56.75 apiece; those of Aboitiz Power gained five centavos or 0.13% to P37.15; while those of UnionBank shed P2.10 or 1.38% to P150 each. source
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