Aboitiz Equity Ventures Inc., the investment arm of the Aboitiz Group, expects to improve this year on its performance in 2023 as it starts to benefit from the full year impact of recent major acquisitions.
“Suffice to say that we are confident that 2024 will see positive growth as we integrate our acquisitions like Citi’s consumer business (for Union Bank of the Philippines), Mactan Airport, and Coca-Cola Beverages Philippines Inc.," said AEV Chief Financial Officer Jose Emmanuel U. Hilado in a press briefing.
He also said that the group continues to be on the lookout for possible acquisitions as it aims to grow its non-power business faster than its power distribution and generation businesses which currently account for about two-thirds of its net income.
“I cannot identify a specific asset at this point but suffice it to say that as part of our diversification strategy, we will continue to pursue opportunities as they come,” Hilado said.
He noted that, “our objective is to have at least 50 percent of our EBITDA (earnings before interest, taxes, depreciation, and amortization) coming from non-power businesses even as our power business continues to grow.
“The consumer market is where we see more opportunities simply because we have a young population and strong consumer consumption and this will continue to anchor our economic growth in the Philippines.”
Meanwhile, Hilado said AEV’s recent acquisition of a 40 percent interest in CCBPI will have “internal synergies, the most obvious is the ability to provide financing facilities to distributors of CCBPI thru UnionBank."
“This allows them to access lower financing costs, therefore, they will have the ability to expand distribution capabilities. The rest can happen in power and economic estate, airports and the food group.”
Following major acquisitions and expansion in 2023, the Aboitiz Group is more than doubling its capital expenditures (capex) to P153 billion this year with a majority allotted to its renewable projects in the pipeline.
AEV said further investments are also being made to develop its retail banking business, support utility infrastructure projects, and expand its food group, among others.
With significant milestones headlining the year such as managing the largest operating private bulk water supply facility in the country and entering the consumer beverages market in a landmark joint acquisition, the Group said it is well-positioned to achieve its growth prospects and contribute towards nation building.
“Our substantial increase in capital expenditures is a clear reflection of our commitment to renewable energy," said Aboitiz Group President and CEO Sabin M. Aboitiz.
He added that, “We believe that investing in sustainable energy sources is not just good for the environment, but also makes good business sense. As a techglomerate, we intend to redefine the meaning of industry and community in the digital age.”
AboitizPower is getting the biggest share at P73 billion, or 48 percent of the Aboitiz Group’s total capex, mainly for the development of its RE projects. This is a major jump from the previous year’s capex and represents the company’s and the Group’s mission of developing cleaner and more sustainable energy sources for the country.
Parent company AEV is allotted with 29 percent, or P44 billion, of the Group’s capex, of which P40 billion is earmarked for the acquisition of Coca Cola Beverages Philippines, Inc. (CCBPI), the bottling arm of Coca Cola in the country.
Aboitiz InfraCapital and its partners have allotted an aggregate P25 billion capex to strengthen and optimize existing assets, while sustaining its growth by exploring new projects and synergies within the Group.
Another P1 billion is allotted for major maintenance works and the purchase of critical spares of the Group’s cement business under Republic Cement.
Pilmico and Gold Coin Group (Pilmico) continues to be one of the leading feed millers in the Asia Pacific region and has been allotted almost P4 billion capex in 2024, mostly for its agribusiness expansion projects.
Aboitiz Land has been allotted P3.3 billion for capital expenditure to support its ongoing projects. Aboitiz Land plans to launch the second building of The Strides at LIMA and will also focus on their strategy of harvesting their existing landbank and promoting group synergy by maximizing the value of various real estate holdings across different Aboitiz Business Units, including the economic estates.