The Gokongwei-led JG Summit Holdings Inc. has increased its capital spending for this year, the bulk of which will go into its property arm Robinsons Land Corp. (RLC) and air transportation business Cebu Air Inc.
JG Summit president and chief operating officer Lance Gokongwei said at the company’s annual stockholders’ meeting held in Ortigas on Thursday the company has allotted P44.2 billion capital expenditure for 2014, higher than the P35.9 billion it spent in 2013.
“The economy is clearly growing, so to ride on that, we are investing a substantial amount [in our projects],” Gokongwei told reporters after the briefing.
It was reported in March that the Gokongwei-led holding firm may allocate as much as P40 billion for capital expenditure this year.
JG Summit chief senior vice president and chief strategy officer BJ Sebastian said in a disclosure in March that the bulk of the capex will fund the expansion of the group’s property, food manufacturing, airlines and petrochemical businesses.
This time, Gokongwei specified that roughly three-fourths of the group’s total capex will go to its property and air transport businesses.
Of the P44.2 billion capex, P16 billion will go to RLC and P14.1 billion to Cebu Air. The remaining amount will go to the group’s other businesses such as Universal Robina Corp. (URC), Robinsons Bank, and JG Summit Petrochemical Corp.
For this year, RLC planned to open seven new malls, five of which already opened. It is also currently constructing its first office building located in Quezon City.
Meanwhile, Cebu Air is soon to operate direct flights from Manila to Sydney, Australia and to Kuwait this year, while its food and beverage arm URC is expected to open several facilities located in Central Vietnam, Myanmar and here in the Philippines.
Although the company declined to give any specific projections, Gokongwei still sees overall growth in its financial performance this year.
“We do expect double-digit growth in our net income,” he said.
Madelaine B. Miraflor