Aboitiz group hikes capex by 83% to P76.7 billion to ramp up expansion

Published March 17, 2017, 10:01 PM By James A. Loyola

http://business.mb.com.ph/2017/03/17/aboitiz-group-hikes-capex-by-83-to-p76-7-billion-to-ramp-up-expansion/

Aboitiz Equity Ventures (AEV) and its strategic business units (SBUs) are ramping up their investments by 83 percent this year to P76.7 billion in capital expenditures (capex) from the R42 billion spent last year.

The firm said the higher capex budget comes on the back of sustained optimism over the country’s economic growth prospects, particularly in the power and infrastructure sectors.

“The Aboitiz Group enters the New Year optimistic about our economy and our national leadership. We support government’s efforts to implement the necessary reforms to ensure inclusive growth for the greater good,” AEV President and Chief Executive Officer Erramon I. Aboitiz said.

He added that, “this year, the Group will take even more deliberate steps in bringing progress to communities in line with our strategic objectives, particularly in our key growth areas of power and infrastructure.”

The bulk of this year’s budget will be used to bankroll key projects in power and infrastructure.

The power SBU’s capex is pegged at P59 billion for the year as it remains committed, along with its partners, to increase total capacity to 4,000 MW by 2020. Bulk of its capex this year will be channeled toward various ongoing power generation projects.

For infrastructure, Aboitiz is allocating P8.1 billion in capex while P5 billion has been programmed by Aboitizland to acquire more industrial and residential properties as it continues to expand its business outside of Cebu, and into the national arena.

A total of P3 billion will go to operating expenses, P1.2 billion for new businesses, and P787 million for expansions and upgrades.

For the banking and financial services SBU, P3 billion will be allocated for initiatives to drive growth in customer businesses and loan expansion, while P21 million will be used for the network expansion of PETNET, the Aboitiz Group’s financial services unit, and the full execution of CitySavings’ loan origination program.

For the food SBU, P1.7 billion will be spent to support various initiatives for its flour, feeds, and farms divisions while pursuing various regional opportunities.

A total of P1.3 billion will be used for expansion and upgrade initiatives, while P434 million will go to operating expenses. Pilmico is currently expanding its customer reach in the Association of Southeast Asian Nations (ASEAN) region while diversifying national operations.