Aboitiz cuts capex to ₱47 B, stays optimistic

Published April 28, 2020, 12:00 AM

by manilabulletin_admin

By James A. Loyola

The Aboitiz Group and its business units is slashing it planned capital expenditures for 2019 by a third to ₱47 billion from the original P73 billion due to the impact of the COVID-19 pandemic on the company and the country.

Aboitiz Group President Sabin M. Aboitiz Officer noted though that, for the most part, the Aboitiz Group is optimistic that it can weather potential headwinds.

However, they are carefully weighing opportunities and further embracing an agile strategy in the execution of its 2020 plans.

“Digital infrastructure investments in previous years and regular business continuity planning has allowed us to cope with the adverse impact of COVID-19. While it’s anyone’s guess how the future will unfold, we assure our stakeholders that we are fully equipped and prepared to guarantee the continuity of all business transactions,” said Aboitiz.

He added that, “Most of our businesses are in industries that are vital to keeping the economy running. Filipinos need electricity, food products, and money, for example. And for our other businesses, we have been prudent in capital expenditure spending so this should not be much of a problem.”

Aboitiz explained that the lower capex budget for the year is because the group has decided to move back some spending, considering the impact on the group’s and country’s future growth.

Most of the capex reductions were from the infrastructure, power, and land units. These mostly covered operating, maintenance, and expansion costs.

At present, Aboitiz Power Corporation’s power generation and power distribution facilities continue to operate 24/7 nationwide.

“While the country’s total demand for power has dipped since the start of the ECQ, we are seeing an increase in consumption due to higher temperature. We also expect a gradual increase in demand as we adjust to the gradual easing of the quarantine,” said AboitizPower President Emmanuel V. Rubio.

Union Bank of the Philippines is leveraging its successful digital transformation strategy in addressing the challenges posed by the COVID-19 crisis.
According to UnionBank President and CEO Edwin R. Bautista, the crisis has accelerated the coming of the digital world as the bank saw its digital customers increase tenfold during the ECQ.

Pilmico Foods Corporation’s plants in Tarlac and Iligan, as well as the company’s swine and poultry farms, continue to be operational since the start of local ECQs. Despite challenges, Pilmico continues with its operations and helps stakeholders meet their needs.

It is business as usual for Pilmico Foods Corporation, food arm of Aboitiz Equity Ventures, Inc. (AEV), which remains operational during the enhanced community quarantine (ECQ), the Philippine government’s to measure to control the spread of coronavirus disease 2019 (COVID-19).

If anything, the company had to expand its operations too, adding the option for its customers to buy its products online.

In a statement, Pilmico said its plants in Tarlac and Iligan, as well as its swine and poultry farms, continue to be operational since the start of local ECQs.
“Despite challenges, Pilmico continues with its operations and helps stakeholders meet their needs,” the company said.
Pilmico said that right now, it continues to address local demand for pork, meat, and eggs with “The Good Meat”, its food solutions brand and fulfilment center.
An e-commerce platform has also been launched in order to widen its reach and serve customers in Metro Manila.

For the rest of the year, Pilmico will still continue its integration with Singapore-based agribusiness firm Gold Coin Management Holdings Ltd.

Aboitiz InfraCapital, Inc. is closely reviewing the impact of COVID-19 on its projects, especially in the airport sector. For its bulk water supply unit Apo Agua Infrastructura, Inc., the company is closely coordinating with its contractors on which specific work streams can be executed amid Davao City’s ECQ, recovery time, and any implications on obligations with Apo Agua’s partners.

Aboitiz Land’s industrial business unit expects fresh demand for new distribution centers and warehouse-type logistics facilities, especially as e-commerce booms. There is also an emerging demand related to manufacturing companies planning to exit China.