ALLIANCE Global Group, Inc. (AGI) said it is leveraging its tourism and leisure segment to drive growth in the medium to long term, supported by its highest capital expenditure (capex) budget since 2016.
“We believe that each of our segments has its own long-term growth story. But we are most excited about the growth opportunities presented by our tourism and leisure segment,” AGI President and Chief Executive Officer Kevin Andrew L. Tan said during the AGI virtual annual stockholders’ meeting on Thursday.
“This is because we still see enormous potential in the country’s hospitality sector, which is recovering from its pre-pandemic performance. The sector is currently recovering, and we see a lot of potential to reach or even surpass pre-pandemic levels,” he added.
AGI has a presence in the tourism and leisure business through its units, Megaworld Corp. and Travellers International Hotel Group, Inc.
The holding company earmarked P75 billion as its capex budget this year, up by 19% from the P63 billion capex spending last year and an eight-year high since the P77 billion worth of capital investments in 2016.
About P55 billion of the capex will be allocated to Megaworld, which plans to expand its real estate portfolio to 35 townships this year with the launch of new developments, mostly outside Metro Manila. It will also develop hotel projects in Iloilo and Boracay.
Some P10 billion will be used by Travellers International to fund ongoing expansion projects within its Newport World Resorts complex in Pasay City. The company is refurbishing the Newport Mansion, which will feature all-suite rooms, garden villas, and bay suites.
“The AGI Group continues to expand its operations in the hospitality sector with a plan to bring its total hotel room keys to around 12,000 in the next few years, up from its 2023 capacity of around 7,500 keys,” Mr. Tan said.
The company will also allocate part of its capital for the development of the commercial area at Westside City in Parañaque City, including the construction of the Grand Opera House, theaters, and cinemas.
Liquor company Emperador, Inc. will get a P6.5-billion capex budget to support expansion plans for whisky operations under Whyte & Mackay, while Golden Arches Development Corp. will receive P4 billion in capex to fund the continued growth of McDonald’s Philippines’ store network.
“AGI remains steadfast and dedicated to driving growth across all its business segments, mindful of its goal to elevate global consumer preferences through aspirational product offerings,” Mr. Tan said.
For the first quarter, AGI saw a 10% drop in its attributable net income to P4.2 billion due to higher input costs, marketing expenses, interest charges, and unrealized foreign exchange losses. First quarter revenue rose by 1% to P50.6 billion.
AGI shares rose by 0.11%, or one centavo, finishing at P8.97 per share on Thursday. — Revin Mikhael D. Ochave
