Alliance Global Group Inc., the investment holding company of billionaire Andrew Tan, will boost its annual capital expenditures to P85 billion in 2019, 14.8 percent higher than P74 billion it invested in 2018.
AGI chief executive Kevin Tan said in a disclosure to the stock exchange about 90 percent of this year’s capital spending would fund the expansion of the group’s real estate and gaming subsidiaries.
“We remain unrelenting in our expansion plans as we view with optimism the country’s economic prospects despite some temporary challenges. We are allocating around P85 billion in capex this year, a significant increase from the P70-billion in actual expenditures in 2018,” Tan said.
He said about 90 percent of this year’s budget would fund the healthy expansion projects of Megaworld and Travellers.
AGI posted a record consolidated net income of P23.7 billion in 2018, up from its restated profit of P22.3 billion in 2017.
The group adopted the accounting changes under Philippine Financial Reporting Standards 15 for its 2018 financial statements which resulted in previous year’s performance being restated for comparability.
Consolidated revenues increased 14 percent in 2018 to P160.7 billion from a restated level of P141.3 billion.
“This is a milestone performance for AGI and proves that our aggressive expansion strategies which we started implementing across our various business segments about five years ago have begun to bear fruit. Now, all our major business segments are contributing strongly to the group’s growth. We look forward to sustaining this momentum in the coming years,” Tan said.
AGI is composed of real estate arm Megaworld Corp., liquor subsidiary Emperador Inc., gaming and leisure operations under Travellers International Hotel Group Inc., quick service restaurants business through McDonald’s Philippines under Golden Arches Development Corp. and infrastructure arm Infracorp Development Inc.
Megaworld earlier reported a 16-percent increase in 2018 net income to P15.2 billion while Travellers International, the owner and operator of Resorts World Manila, recorded an attributable net income of P1.4 billion, up sharply from P290 million in 2017.
Emperador saw its net income rise 5 percent to P6.7 billion.
GADC which holds the exclusive franchise of McDonald’s in the Philippines reported attributable net income of P1.6 billion in 2018 on sales revenues of P28.3-billion. Same-store sales rose 4 percent.
GADC ended 2018 with 620 stores, up from 566 stores in 2017. It targets to add 60 next-generation stores this year.