Ayala Group allots P185 B for capex

MANILA, Philippines - Ayala Corp. (AC), the country’s oldest conglomerate, is pouring in a total of P185 billion this year as it continues to ramp up investments across all its business units.

The Ayala Group said the capital expenditures (capex) being earmarked this year is aimed at supporting the massive expansion plans of its core real estate and telecommunications businesses, as well as higher investments in power generation and transport infrastructure. 

Bulk of this year’s spending will go to real estate arm Ayala Land Inc. (ALI), which has set aside a record P100 billion capex to bankroll its aggressive expansion program in line with its 2020 business plan.

ALI’s vision seeks to grow its net income to P40 billion by 2020 from P11.7 billion in 2013 at an average growth of 20 percent annually.

Aside from ALI’s budget allocation, AC said a large chunk of the conglomerate’s capital spending this year would go to Globe Telecom Inc.

Globe has programmed around P29 billion in 2015 primarily for data-related initiatives and LTE network infrastructure upgrades.

With P8 billion from its planned CAPEX in 2014 sliding into the first half of this year largely due to timing issues, AC said Globe’s total capital spending would be about P37 billion for 2015.

“We started an aggressive growth strategy a few years back and we continue to undertake value enhancing opportunities amidst this sustained momentum in our economy. Each of our business units are seizing investment opportunities within their individual spaces under this positive environment,” AC chairman and chief executive officer Jaime Augusto Zobel de Ayala said.

While big portions are allotted for its core businesses of real estate and telecom, AC said it would also deploy a relatively large amount or P21 billion this year to support investment programs in power generation and transport infrastructure.

“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,” Zobel said.

The rest of the amount would be used to fund the growth initiatives of the other business units, including Manila Water Co., Inc., Bank of the Philippine Islands, and Integrated Micro-Electronics Inc., AC said.

“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,” AC chief finance officer Delfin Gonzalez Jr. said.