January 29, 2014 9:27 pm
With huge amount needed for its power investments, the capital spending of the whole Aboitiz Group for this year could reach P88 billion.
A statement showed on Wednesday that conglomerate Aboitiz Equity Ventures (AEV) will be allocating as much as P88 billion for its capital expenditure (capex) this year.
According to the company, of the P88-billion capex, P78 billion will be used by the group’s power unit.
“[AboitizPower] continues to explore and build new power plants in response to the country’s need for additional power generating capacity amid the tightening supply-demand situation for energy,” AEV said.
Together with its partners, AboitizPower is implementing a five-year plan to build additional power capacity of up to 2,098 megawatts (MW) by 2017.
To date, the listed group’s power unit is constructing three run-of-river hydro plants with an equivalent output of 28 MW.
This consists of the 14-MW Tudaya I and II hydro plants in Mindanao which are expected to be completed by the first half of 2014, and the 13-MW Sabangan hydro plant in Luzon, which will be finished by early 2015.
The 300-MW Davao baseload plant, which broke ground in 2012, is also expected to be completed in 2015 to help address the power supply shortfall in Mindanao.
Moreover, AboitizPower is planning to start the expansion of its Pagbilao baseload plant as well as the construction of its Cebu baseload plant within 2014.
These two projects, as cited by the firm, will increase capacity in the Luzon and Visayas grids by an additional 400 MW and 300 MW, respectively, by 2017.
As for AEV’s other business unit, its banking arm UnionBank will get 680 million in capex which will be intended for its technology-related expenditures and the expansion of its branch network.
The holding firm’s food subsidiary, Pilmico, is also spending P2.7 billion for the expansion of its feeds and farms operations, through the construction of two feedmills plants, and the expansion of its reeder and growing-finishing farms.
Meanwhile, property unit AboitizLand estimated that it will be spending roughly P4 billion as it opens new phases for its Priveya ills, Pristina North, and Almiya projects. The developer is also looking at launching at least three new residential projects within the year.
AboitizLand recently entered into a joint venture agreement with Ayala Land Inc. for the development and operation of a 15-hectare city center in Subangdaku, Mandaue City in Metropolitan Cebu. AEV’s fuel unit, Aseagas, on the other hand, will break ground for its $50-million liquid biomethane plant, which will produce transport fuel from organic waste.
Once completed, the plant will have a capacity of around 9,000 metric tons of bio-methane per year. Construction is expected to be completed within 18 months. Aseagas will be another producer of clean energy for Aboitiz.
Dragged by the losses incurred by its power unit, the 2013 third quarter and nine-month consolidated net income of Aboitiz Group dipped by 25 percent to P4.6 billion and 8 percent to P16.6 billion, respectively.
Out of the total earnings contributions from the AEV’s strategic business units, power accounted for 80 percent, while the income contribution of its banking, food and real estate business units were at 12 percent, 7 percent and 1 percent, respectively. source
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