ALLIANCE Global Group, Inc. (AGI) plans to spend P410 billion in capital expenditures (capex) over the next five years to sustain the expansion of its property, liquor, gaming, restaurant, and infrastructure businesses.
In a statement Monday, the holding firm of tycoon Andrew L. Tan said the budget for 2020 until 2024 is higher than the P377 billion it allocated from 2015 to 2019. This is also almost double the P218 billion it spent from 2010 to 2014, the same time it expanded internationally.
“Our five-year capital spending program signals our ongoing thrust to pursue an aggressive but organic growth strategy for our various businesses. It is our intention to continue to reinvest in these businesses to sustain our growth pace,” AGI Chief Executive Officer Kevin Andrew L. Tan said in a statement.
Listed property unit Megaworld Corp. cornered 73% of the spending, as the firm embarks on the further development of townships across the country. Its townships feature a mix of residential, office, lifestyle malls, and hotel projects.
Megaworld earlier said its capex for the 2020-2024 period is at P300 billion, 35% of which will be used for future land acquisitions. By 2020, the company targets to add 2,000 hectares of land to its existing holdings of about 4,700 hectares.
About 15% of the budget will go to Travellers International Hotel Group, Inc. (TIHGI), the owner and operator of Resorts World Manila. This will mainly be used for the development of Westside City Resorts World, its second integrated resort and casino project inside the state-owned Entertainment City complex in Parañaque.
The gaming firm will start construction of the casino and mall once piling works are completed on the 30.5-hectare property.
Meanwhile, around five percent will be spent for Golden Arches Development Corp. (GADC). The exclusive licensee of the McDonald’s brand in the Philippines hopes to add about 50-60 stores every year, in addition to its current network of 633 stores.
Part of the expansion for GADC is to roll out more modern stores under the NXTGEN concept, featuring self-ordering kiosks, modern menu boards, and card payment acceptance. The company currently has 62 such stores across the country.
AGI’s liquor manufacturing arm Emperador, Inc. will get about four percent of the planned capex, primarily to maintain its operations. Given its large investments in 2014, Emperador said it is focused on an organic growth strategy that will boost its whisky products under Whyte and Mackay, as well as Spanish brandy products under Bodegas Fundador.
“The company is also expanding its product mix in the domestic market with the recent introduction of The Bar Premium Gin, while it maintains market leadership in the brandy segment with its flagship Emperador Brandy,” AGI said.
The remaining three percent will be spent for the infrastructure projects of Infracorp Development, Inc. The newest of AGI’s business units is currently awaiting regulatory approval for its proposed two-kilometer Skytrain connecting Fort Bonifacio to Makati. It is also part of the consortium that wants to rehabilitate the Ninoy Aquino International Airport.
AGI’s net income attributable to the parent jumped 21% to P4.35 billion in the first quarter of 2019, after gross revenues also went up 19% to P39.47 billion.
Shares in AGI slipped 0.13% or two centavos to close at P15.42 apiece on Monday. — Arra B. Francia