Ayala raises 2015 capex 23% to P185B

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Property development gets 54% of total

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The Ayala group of companies is increasing its capital expenditure this year by 23 percent to P185 billion from the actual P150 billion spent last year.

Bulk of P185 billion will go to its property unit Ayala Land Inc. (ALI) (P100 billion), while P37 billion will be for Globe Telecom Inc., P21 billion for parent firm AC in its investments in power generation and transport infrastructure, and the rest (P27 billion) for its other subsidiaries Manila Water Company Inc., Bank of the Philippine Islands (BPI), and Integrated Micro-Electronics Inc. (IMI).

AC chairman and CEO Jaime Augusto Zobel de Ayala said that the conglomerate is taking all investment opportunities present under the current sustained economic growth. “We started an aggressive growth strategy a few years back and we continue to undertake value enhancing opportunities,” he said.

“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,” he added.

“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,” he added.

ALI’s P100 billion capex will focus on its “2020 Vision” expansion program to grow its net income by 20 percent annually to reach P40 billion by 2020 from P11.7 billion in 2013.

For Globe, the P37-billion budget will mostly boost its mobile data business and LTE network infrastructure upgrades.

For the conglomerate AC, the P21-billion war chest will support investments in power generation and transport infrastructure.

The parent firm needs $1.6-billion (P71.04 billion) in funds for an additional 1,600-megawatt (MW) power capacity targeted to go online by 2018.

AC, through its infrastructure unit AC Infrastructure Holdings Corp. (AC Infra), also requires more capital for its Light Rail Transit (LRT) Line 1 Extension project through the joint venture company Light Rail Manila Corp. (LRMC), and to bid for the Cavite-Laguna Extension project.

LRMC is a tripartite partnership among AC Infra, Pangilinan-led Metro Pacific Investments Corp. and Macquarie Infrastructure Holdings (Philippines) PTE Ltd. (MIHPL).

“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,” said Ayala Corp. chief finance officer Delfin Gonzalez.

In the first nine months of 2014, AC netted P14.1 billion, up 35 percent from the same period in 2013 on the strong performance of its real estate, telecom and water subsidiaries.

Its nine-month performance is in line with its target to grow its net income by 25 percent to 30 percent last year from 2013’s P12.8 billion. AC’s full-year financial results will be released in March.

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