Ayala power business to propel earnings past P20B by 2016

Manila Bulletin
by James Loyola
April 11, 2014

Ayala Corporation expects to surpass its initial P20-billion net income target by 2016 on the back of sustained momentum of its property and banking units, the tapering of its telecom business’ depreciation charges, and the continued improvement of its international businesses.

During the firm’s annual stockholders’ meeting, Ayala President Fernando Zobel de Ayala said “overall, we are optimistic that the growth momentum in 2013 will be sustained in the coming year.”

“Our earnings outlook remains upbeat with mostly double-digit earnings growth expected in 2014. This puts us in line with our aspiration to surpass the P20-billion net income level by 2016,” said Zobel.

Ayala chief financial officer Delfin Gonzales said “we believe we are in the trajectory to hit the P20-billion target. A big part of the contribution will come not only from existing businesses but also from energy. In the case of GN Power, they are now on commercial operations.”

Next year, South Luzon Thermal Energy Corporation’s line 1 will be operational and the second line will start operating by 2015.

Meanwhile, Ayala managing director and corporate strategy and business development head John Eric Francia noted that Globe Telecom’s accelerated depreciation (due to its modernization program) will “disappear” in the first quarter this year.

Zobel said Ayala continues to be on the lookout for energy investments as it still has $400 million to spend until 2016 from its committed capex for the sector.

“In terms of the size in megawatts, we are now over 1,000 MW gross. In terms of attributable, it is 350 MW. The current set of investments over $400 M delivers that. As mentioned earlier, we have strong pipeline,” Francia said.

Ayala expects to close in the next few months its project in Lanao del Norte consisting of 3 to 4 units of 135 MW each with an investment of $200 million to 300 million.

In Mariveles, Bataan, Ayala hopes for a financial closing before the end of the year for the second plant beside GN Power. It will be building two 600 MW power plants. Attributable is 600 MW for Ayala’s 50 percent stake for an investment of about $300 million.

“We could potentially surpass 1,000 MW attributable once that is closed,” Francia said. source