Conglomerate Aboitiz Equity Ventures Inc. said Monday it reduced its planned 2020 capital expenditures to P47 billion from an initial target of P73 billion as the company weighs business strategy amid the current economic conditions.
Aboitiz Equity said in a statement it would move back some spending considering the impact of the coronavirus disease 2019 pandemic on the company’s operations and future growth.
Most of the capex reductions were from the infrastructure, power, and land units. These mostly covered operating, maintenance and expansion costs, it said.
The company said that with the ongoing global threat of COVID-19, the group and its business units were carefully weighing opportunities and further embracing an agile strategy in the execution of the 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 Group president and chief executive Sabin Aboitiz.
Aboitiz Group started adjusting to a work environment that vastly changed since the middle of March amid the COVID-19 pandemic.
“One of the first steps we took was to protect our team members. We earmarked P900 million in assistance [early release of end-March salary and the 13th or 14th month pay] to help our team members cope with the COVID-19 pandemic. We did more online work, more work from home—preventive measures are going to be the name of the game until a COVID-19 vaccine is developed,” Aboitiz said.
Under the Department of Energy’s new Department Circular No. 2020-04-00080, communities that host power generation projects can now use their Energy Regulations 1-94 (ER 1-94) revenue shares from these facilities to combat the effects of COVID-19.
About P500 million worth of ER 1-94 funds are currently available for AboitizPower’s host local government units for their COVID-19 response efforts.
It said P400 million in monetary and in-kind assistance were extended to serve affected communities and medical and government frontliners nationwide.
Aboitiz Group contributed P1.8 billion for its COVID-19 response efforts. The amount excludes various payments waived, reduced, extended or restructured to help customers cope with the impact of COVID-19.
The conglomerate said it remained optimistic that it could weather potential headwinds. “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 said.