AC Energy Holdings Inc., the power generation subsidiary of conglomerate Ayala Corp. (AC), expects its major power projects to be in “steady state” by 2017, in line with its parent’s five-year blueprint toward 2020, a top official said on Friday.
John Eric Francia, AC Energy president, told reporters after AC’s annual stockholders meeting that the company sees stable operations in four out of its six power projects by 2017.
“By 2017, I think we should be going to a steady state already. Those four platforms account for about $340 million in equity investment,” Francia said.
“We’ve committed over $700 million, but it excludes the (11-megawatt Ifugao) mini-hydro and the GN Power Mariveles coal plant in Mindanao. Those will serve as the second phase” toward 2020, he said.
Assuming a 15 percent average return on equity, the four projects are expected to contribute at least $51 million of earnings by that time.
The four projects include the 540-MW coal-fired power plant in Kauswagan, Lanao del Norte, which will be operational by 2017; the 135-MW unit of a coal-fired power plant in Calaca, Batangas; and the aggregate 133-MW capacity from two wind farms in Bangui and Pagudpud, Ilocos Norte.
Francia said they are still testing the waters on reviving their venture into solar power
given the need for further studies and “advancements in technology.”
He said they are also “interested” in venturing into the liquefied natural gas (LNG) segment.
The Ayala Group has recently unveiled its five-year blueprint from 2016 to 2020 for the expansion of its power (70 percent) and infrastructure businesses (30 percent). The five-year spending will likely surpass the $1 billion invested during the 2010-2015 plan.
The five-year program will also include the operation and maintenance contract for the Light Rail Transit (LRT) Line 1 Extension project with Metro Pacific Investments Corp., as well as two other public-private partnership (PPP) projects — the P123-billion Laguna Lakeshore Expressway Dike project and the North-South Railway (the South Line Phase 2).
“We’re focused on projects and infra because those are big-ticket projects that we’re interested in,” Francia said, who is also the president and chief executive officer of AC Infrastructure Holdings Corp.
Earlier, the Ayala Group expressed optimism that it would hit its P20-billion net income target this year on strong performances across its business segments.
For the whole group, AC programmed capital expenditure of P185 billion this year, which is 23 percent higher than the actual P150 billion capital spending in 2014.
AC’s consolidated net income in 2014 increased 45.3 percent to P18.6 billion from P12.8 billion in 2013 due to strong growth in its property, telecommunications, electronics manufacturing, and business process outsourcing (BPO) units.
The parent conglomerate is targeting 25 percent to 30 percent growth yearly in profits and sales, in line with its above 20-percent growth for the past three years.
Founded in 1834 and incorporated in 1968, AC is the holding company of the Ayala family’s businesses, which include water (Manila Water), telecommunications (Globe), property (ALI), semiconductors (IMI), banking (BPI), power (AC Energy), infrastructure (AC Infra) and BPO and education (LiveIt Investments) among others. It is 50.56-percent owned by Mermac Inc., 10.52-percent by Mitsubishi Corp. and 38.92-percent by the investing public.