ALLIANCE GLOBAL Group, Inc. (AGI) is embarking on a P2.5-billion share buyback program for the next 12 months.
In a statement issued Wednesday, the holding firm of tycoon Andrew L. Tan said its board of directors has approved the buyback exercise that will start on the 23rd and end on Sept. 23, 2020.
This will continue its P5-billion share buyback program expiring this month, or 24 months since it started on Sept. 20, 2017. AGI said it bought a total of 309 million shares worth about P4.28 billion during the period.
“We continue to pursue a share buyback because we believe in our stock’s underlying value, which is backed by our strong franchises across all our business segments, years of profitable operations, and continued expansion thrust,” AGI Chief Executive Officer Kevin Andrew L. Tan said in a statement.
The AGI shares will be bought in cash and will be booked as treasury shares.
“The share buyback is also EPS (earnings per share)-enhancing and should improve our share values moving forward,” Mr. Tan said.
Shares in AGI dropped 0.48% or six centavos to close at P12.50 each at the stock exchange on Wednesday.
AGI’s net income attributable to the parent dropped 11% to P3.75 billion in the second quarter of 2019, amid a 17% uptick in gross revenues to P40.93 billion. On a six-month basis, attributable profit was up 4% to P8.1 billion, while revenues climbed 15% to P82.8 billion.
The listed conglomerate has committed to spend P410 billion in capital expenditures over the next five years, about nine percent higher than its P377-billion spending from 2015 to 2019. This aims to support the expansion of AGI’s business units, which includes property, liquor, gaming, quick-service restaurants, and infrastructure.
About 73% of the capex will be poured into property unit, Megaworld Corp., as it continues the development of more townships across the country.
Megaworld recently launched its 25th township called Arden Botanical Estate, in partnership with leisure and tourism developer Global-Estate Resorts, Inc. The firms will spend P18 billion over a 15-year period for the project.
Travellers International Hotel Group, Inc., which owns and operates Resorts World Manila, cornered 15% of the capex, as it will be developing Westside City Resorts World inside the state-owned Entertainment City complex in Parañaque. The total capex for the integrated resort has been set at P57 billion.
The rest of the capex will be split among Golden Arches Development Corp., Emperador, Inc., and Infracorp Development, Inc. — Arra B. Francia