Aboitiz Equity Ventures Inc. (AEV) said it is allocating a bigger budget for new businesses as the company has set its sights on reducing its reliance on power generation.
Manuel Lozano, the company’s CFO, said out of the P69 billion in capital expenditures (capex) allotted for the year, its biggest component or about 42 percent will go to capital-intensive infrastructure projects.
“This help boost the growth of our newest endeavors, namely economic estates, common towers, bulk, water, and, of course, other digital initiatives,” Lozano said.
The amount will also be used to complete the group’s bulk water project in Apo Agua in Davao.
“This is in line with our long term goal of balancing our portfolio by accelerating the growth of the non power business units. All in all, the above is group’s steady performance and growth powered by strong strategies, well thought out strategies, partnerships, and innovations, as well as balanced and balanced by prudence and responsibility will continue to create high value reflective of our work and expected by our shareholders, and all of our stakeholders.”
Last year, the company spent some P27 billion in capex, half of which was allocated for the power business.
This year, however, it is allocating some P28 billion for its power business, still more than the previous year’s entire capex.
More than half the company’s business came from power, which grew by double digits every quarter. As such, the company wants its other businesses such as food, property development, and infrastructure to grow at the same rate.
AEV’s infrastructure business units will spend some P29 billion this year, more than four times its spending last year, the company said.
Some P7 billion will be allocated for land acquisition and new site development for Aboitiz InfraCapital’s economic estates, while P5 billion is earmarked for the expansion of its telco tower business. Another P5 billion will go to other digital infrastructure projects.
Meanwhile, P3 billion has been set aside for the completion of its bulk water project in Davao City this year. Once operational, this water project will supply over 300 million liters of safe and sustainable water. The rest of the budget will be for other projects and Republic Cement’s major maintenance and safety related capital expenditures.
Sabin Aboitiz, the company’s president and CEO, earlier said the group is committed to invest in accelerated growth and diversification in the next 10 years. “We will advance business and communities in the 9 Asia Pacific countries where we operate by providing products and services that are not just life-essential but life-changing.”