CONGLOMERATE Ayala Corp. said it is increasing its capital expenditures (capex) this year by 13 percent to P185 billion this year, to support the growth of its property development, telecommunications and water units and ramp up its emerging businesses in power, industrial technologies, health care and education.
The figure could be a record high for the company that is present in most of the country’s profitable industries.
In 2015 the company said it was spending P185 billion, but ended short after spending only P132 billion for the year.
Last year the company spent about P164 billion, again falling short of its announced spending budget of P174 billion.
A large portion of its 2017 capex is being allocated to Ayala Land Inc., which has set aside P88 billion mainly to bankroll the completion of its residential, office for sale and leasing projects.
Globe Telecom Inc., the country’s No. 2 telecommunications firm, alloted P37.5 billion to drive its data-network infrastructure upgrades, including expenditures for deployments of Long-Term Evolution mobile and home broadband, expansion of network capacities and coverage, and enhancement of corporate-data services.
At the parent level, Ayala will deploy P21 billion in capital spending, mainly to support the expansion plans of its power unit AC Energy.
Manila Water Services Inc. has set aside P20 billion to support its initiatives in the Manila concession area, as well as its expansion plans outside Metro Manila.
The rest of the capex will be deployed across AC Industrials, Bank of the Philippine Islands, AC Health and AC Education.
The company did not give a breakdown of its capex for these sectors.
“The aggressive capital spending we have programmed this year reflects the Ayala group’s continued optimism in the domestic environment,” Ayala Chairman and CEO Jaime Augusto Zobel de Ayala said.
“While we remain mindful of macroeconomic indicators that may affect the overall business landscape, our business units continue to perform well and carry out their strategic direction for 2020,” he said.
Last year Ayala announced its target to double its net income to P50 billion by 2020 on strong growth projections in its core businesses.
Ayala Land said it is reducing its greenhouse-gas emissions in its commercial properties and aim for carbon neutrality by 2022.
The company said it plans to achieve this through a combination of initiatives, which include passive cooling design, energy efficiency, renewable-energy sourcing and carbon offset mechanisms, such as forest regeneration and protection.
“As we execute and accomplish our plans, we firmly believe our company’s success and growth cannot be measured solely in terms of profitability and market presence,” Ayala Land Chairman Fernando Zobel de Ayala said.