ALLIANCE Global Group, Inc. (AGI) will be spending P85 billion in capital expenditures (capex) this year, as the company seeks to further expand its property, liquor, gaming, and restaurant businesses.
This year’s capex is higher by 15% compared to the P74-billion AGI spent in 2018. The listed conglomerate said about 90% of the budget will be used for property unit Megaworld Corp. and gaming and leisure unit Travellers International Hotel Group, Inc. (TIHGI).
“We remain unrelenting in our expansion plans as we view with optimism the country’s economic prospects despite some temporary challenges,” AGI Chief Executive Officer Kevin L. Tan said in a statement.
The higher spending follows AGI’s 6.23% increase in profits to P23.7 billion last year, compared to the P22.3 billion it posted in 2017. The company noted that it restated its 2017 profit to reflect changes in accounting standards.
Consolidated revenues also jumped 14% to P160.7 billion, higher than its restated topline worth P141.3 billion in 2017.
“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,” Mr. Tan said.
Megaworld reported an attributable profit of P15.2 billion in 2018, 16% higher year on year, after revenues went up 15% to P57.4 billion. The company attributed its strong performance to the 21% growth of its rental income, accompanied by an 11% increase in real estate sales.
The listed property developer ended the year with 1.5 million square meters in gross leasable area for its commercial segment. It also managed to book P135 billion in reservation sales coming from new projects launched in the previous year.
For TIHGI, the owner and operator of Resorts World Manila, attributable profit almost quintupled at P1.4 billion, compared to its 2017 figure of P290 million. This followed a 17% increase in its gross revenues to P24.7 billion, as property visitation reached an average of 28,500 people per day.
The company benefited from the opening of a new gaming floor at RWM’s Grand Wing, boosting gross gaming revenues 17% higher to P20 billion. At the same time, the company opened Hilton Manila last year, lifting its non-gaming revenues 17% higher to P4.7 billion.
Meanwhile, Emperador, Inc posted a 5% increase in attributable profit to P6.7 billion, after revenues advanced 10% to P47.1 billion. The listed brandy producer was driven by its international whiskey operations under the brand Whyte & Mackay.
Golden Arches Development Corp. (GADC), which holds the exclusive franchise to the McDonald’s brand in the country, posted P1.6 billion in attributable profit on the back of P28.3 billion in sales revenues. Same-store sales growth stood at 4% for the period.
McDonald’s now has 620 stores under its network, higher than the 566 stores it had in 2017. It is set to add another 60 stores this year, all of which will feature self-ordering kiosks, modernized menu boards, and cashless payment modes under its NXTGEN model.
Shares in AGI jumped 2.76% or 44 centavos to close at P16.40 each at the stock exchange on Monday. — Arra B. Francia