Conglomerate Ayala Corp. said Monday it earmarked P249 billion for 2018 capital expenditures to support the expansion of core businesses, after recording a 16-percent net income growth to P30.3 billion in 2017.
Ayala Corp. said in disclosure to the stock exchange this year’s capital spending program would also be used to finance expansion and growth initiatives of units Ayala Land Inc., Globe Telecom and Manila Water Company Inc.
It said at the parent level, it earmarked P51.8 billion in capital spending this year to fund subscription in Bank of the Philippines’ stock rights offering and investments in AC Energy, AC Industrials, AC Education and AC Health.
Ayala Corp. said the strong 2017 financial results were boosted by equity earnings contributions from group’s business units, which reached P35.8 billion in 2017, or 12 percent higher than a year ago.
This was led by Ayala Land and AC Energy whose equity earnings contributions expanded 21 percent and 30 percent, respectively.
“We are happy to see this earnings momentum sustained for the sixth consecutive year as the expansion strategy across our portfolio of businesses continues to bear fruit. Consistent double-digit growth since 2012 has translated into a compounded annual growth rate of 22 percent. We remain positive about our trajectory as we move closer to our 2020 goals,” Ayala Corp. president and chief operating officer Fernando Zobel de Ayala said.
AC Energy’s net earnings jumped 31 percent to P3.5 billion in 2017, driven by fresh equity earnings contribution from geothermal platform and boosted by solid contributions from wind energy assets.
AC Energy continues to execute its diversification strategy with the acquisition of Salak and Darajat geothermal sites in Indonesia in early 2017. It recently teamed up with BIM Group of Vietnam to jointly develop over 300 megawatts of solar power projects in Ninh Thuan province.
AC Energy is also boosting its conventional energy portfolio in the Philippines with the construction of 2 x 668 MW super-critical coal-fired power plant in Bataan province.
Meanwhile, AC Industrials registered a net income of P1.2 billion in 2017, up 4 percent from 2016, on better performance of electronics manufacturing and vehicle retail units.
The conglomerate said AC Industrials continued to ramp up its portfolio in global and domestic industrial technologies by capitalizing on opportunities from disruptive technological shifts, changing industry landscapes and increasing demand from end-users.
AC Health also continued to scale up platforms in retail pharmacy and primary care. Generika, its retail network of affordable quality generic medicines, recorded P3.3 billion in revenues, up 15 percent from a year ago on higher retail sales and store expansion.
It opened 100 stores in 2017, bringing the total store count to 750. AC Health is targeting to expand Generika’s total store count to 850 by end- 2018.