By VG Cabuag
ABOITIZ Equity Ventures Inc. (AEV), the holding firm of most of the Aboitiz family’s businesses, said it will use lower capital expenditures (capex) this year. The bulk of the capex will be used for its capital-intensive power-expansion projects.
The company said it will spend P58.4 billion, 2.6 percent lower than last year’s P60-billion capex and much lower than the P88 billion spent in 2014.
“Each of our businesses has the potential for higher financial return and growth, as well as sufficient scale and capability to deliver long-term value for all our stakeholders,” AEV President and CEO Erramon Aboitiz said in a statement.
Aboitiz Power will again get the lion’s share of the capex at P52 billion, or 89 percent of the total expenditures for the year. The rest of the budget is spread across all its other units that span banking, food and property development.
Aboitiz’s energy assets comprise three-fourths of the company’s operation. The company said that along with its partners, it remains committed to increase its total capacity to 4,000 megawatts (MW) by 2020 or close to double of 2,402 MW of sellable capacity as of end of 2015. The company said it will launch its first solar-power project in San Carlos City, Negros Occidental, within the first quarter of the year.
Last month it inaugurated the 300-MW Therma South Inc. baseload plant in Davao, to provide a capacity boost to the Mindanao grid. The first unit started operations in September last year, while the second one started full commercial operations last week.
Other ongoing construction projects include the 68-MW Manolo Fortich hydropower plant in Bukidnon; 8.5-MW hydropower plant in Isabela; 300-MW Therma Visayas baseload plant in Cebu; and the 400-MW Pagbilao III expansion in Quezon Province.
The company also identified about 200 MW of potential run-of-river power projects across the archipelago for the next five years.
Meanwhile, AEV’s banking and financial services companies will have a combined capex of P968 million. The bulk of the amount, or P871 million, will be allocated for UnionBank, the country’s seventh-largest lender by assets, as it has initiatives to push growth in customer businesses supported by loan expansion.
About P97 million has been allocated for its newest remittance business PETNET to expand its branch network and full-blown execution of the loan origination program on behalf of City Savings Bank, also a unit of AEV.
Food unit Pilmico Foods Corp. has been allocated P2.3 billion for the year as it expands its customer reach in Southeast Asia while diversifying operations in the country. The company said the amount will be used to fund the expansion of its flour, feeds and farm divisions.
AboitizLand Inc., the property-development arm, is spending P2.7 billion to acquire more industrial and residential land, as it continues to expand its business outside of Cebu.