By James A. Loyola
The Ayala group of companies expects capital expenditures (capex) to amount to P250 billion this year, the same level allocated for 2018, with its real estate and telecommunications businesses seen to make the biggest investments.
Ayala Corporation logo (Photo courtesy of www.ayala.com.ph/)
In an interview, Ayala Chief Finance Officer Jose Teodoro K. Limcaoco said most of the capex will be at the subsidiary level because there is no foreseen major investment at the parent company level.
“Last year we had a big capex spend for the BPI (Bank of the Philippine Islands) rights offer, IMI (Integrated Micro Electronics, Inc.) rights offer. As a group, I think it’s about the same. Because ALI (Ayala Land, Inc.) and (Globe Telecom, Inc.) has good capex. But as a parent, less this year than last year,” Limcaoco told reporters.
Last year, the parent company, which includes the banking, energy, industrial and other new ventures, had a capex budget of P51.8 billion.
“We’re very pleased with the power, how the power business has grown. Personally I’m very happy towards green and renewable. We are being very focused on that. And this funding is basically complete (after we raised) $410 million from green bonds and the sale of AA Thermal, Inc. to Aboitiz. We got enough funding moving forward,” he said.
However, Limcaoco said the group is mindful on the moves of the new third telco player of Davao-based businessman Dennis Uy which is backed by China Telecom. Ayala’s Globe Telecom is the country’s second largest telecom company.
“We get to be realistic, that is a concern, even though their business I think probably doesn’t pick up speed until towards the end of the year or next year,” he said.
Limcaoco noted that, “everyone is watching the third telco, they’re a credible player, China Telecom, Udenna, Mr. Uy is a credible businessman. And the question is how fast can they get the business going.”
“We have a decent capex program this year to continue to build out the network and improve it, part of the capex is also to build a business on the home broadband front,” he said.