By Arra B. Francia, Reporter
ABOITIZ EQUITY Ventures, Inc. (AEV) may set aside between P40 to P50 billion in capital expenditures for 2018, with its power unit cornering the bulk of the spending as it completes several power projects next year.
“Probably P40 to P50 billion, overall. Not just power. Power will still be the main,” AEV Chief Finance Officer Manuel R. Lozano told reporters in a press chat in Taguig City last week.
Next year’s spending plan is significantly lower than the P77-billion capex for 2017.
AEV’s power segment, AboitizPower Corp. is targeting to add around 500 megawatts (MW) of installed capacity by next year.
“Pagbilao should be finishing soon. Therma Visayas in Cebu both units by middle of the year. First one should be March, April. Second one by June. Manolo-Fortich will also be finishing. So there’s gonna be a lot of new capacity for us next year, 2018,” Mr. Lozano said.
The Pagbilao power plant expansion in Quezon province has a capacity of 400MW, but half of this will be attributable to its foreign partners TeaM Energy Philippines, a partnership between Japanese firms Tokyo Electric and Marubeni Corp.
The 340MW plant by AboitizPower unit Therma Visayas, Inc. in Toledo City, Cebu will also be finished in 2018, with 20% of the capacity to be shared with its partner, Vivant Corp.
“So the 500 (MW) more or less, that’s our equity interest. That probably will bring us to close to 3,500MW… We’re well below the grid limit, probably overall in the country at 18%,” Mr. Lozano said.
The executive of one the country’s largest power producers said they may also allocate funds for the expansion of its cement plant. AEV’s infrastructure arm, Aboitiz InfraCapital, Inc. owns Republic Cement and Building Materials, Inc. To date, Republic Cement’s current capacity stands at seven million tons.
“Our cement (plant), we may begin 2018 or early 2019 to also expand, potentially, so that will also be a big capex as well. But that one is a question of timing,” Mr. Lozano said.
Meanwhile, AEV is also targeting the completion of its bulk water supply project in Davao City by 2019. Construction of the P10-billion project in partnership with JV Angeles Construction Corp. has been pushed back to the first quarter of 2018 due to various government permits and documentary requirements.
“Water supply in Davao hasn’t been enough for a long time, because in Davao City all of their water comes from the ground, it’s ground water. (It’s) depleting, but more importantly the quality is not good. Because the deeper you are, the more chemicals, contaminants, and then more expensive to pump the water up,” Mr. Lozano said.
This will further have a 1.5-MW hydro power component that will be used exclusively for the operation of the bulk water project.
AEV posted a 6.9% decline in attributable profit for the first nine months of 2017 to P15.9 billion, pulled down by the recognition of foreign exchange losses upon revaluation of dollar-denominated liabilities and pre-termination costs. Revenues for the period were up 27% to P111.48 billion.
Aside from power and infrastructure, AEV also has core interests in financial services, food manufacturing, real estate, and portfolio investments.