By Arra B. Francia, Reporter
ABOITIZ EQUITY Ventures, Inc. (AEV) has allocated P77 billion for its capital expenditure program this year, after spending less than what it initially budgeted in 2017 due to the delay of some projects.
AEV Chief Financial Officer Manuel R. Lozano explained that the company had committed to spend the same amount last year, but was only able to roll out around P35-40 billion.
“We didn’t spend all of it because some of our project were carried over. So I expected the same last year and this year but we spent less, we only spent about P35 billion or so last year, so that excess moved to 2018,” Mr. Lozano told reporters late Friday in Makati City.
AEV’s bulk water project in Davao City called Apo Agua was among the projects that failed to push through in 2017, as the company battled with delays in processing permits.
The listed conglomerate aims to spend P13-14 billion for the Apo Agua project. With a planned capacity of 300 million liters per day, Apo Agua will be the biggest bulk water project in the country.
Mr. Lozano said the company aims to secure the permits for the project within the next few months, after which AEV will immediately start construction. For now, the company has already started clearing the site for Apo Agua, and has signed the engineering, procurement and construction contract.
Aboitiz Power Corp. (APC) will corner around P60 billion of the 2018 capex, as the company pursues more power projects. The company earlier set a target of adding 500 megawatts of installed capacity by this year.
AEV’s food, cement, and land segments will each have around P4-5 billion in 2018, while the remaining funds will be used by the banking segment, UnionBank of the Philippines.
“The remaining will be for UnionBank. UnionBank will be spending some capex for technology,” Mr. Lozano said.
AEV’s cement business, Republic Cement and Building Materials, Inc., started to see demand for cement pick up in the first quarter.
“Government has picked up quite a bit last year versus a year ago and the home builders (demand) is steady. It looks like demand is stronger so far in the first quarter. More important for us is the downward trend of prices have since been abated, and in some pockets now there’s some improvement,” Mr. Lozano said.
The company is currently debottlenecking its existing plants in order to realize their full capacity. Should demand come in stronger in the coming months, Mr. Lozano said AEV may look into expanding its cement plants by more than half its current capacity of seven million metric tons.
“But that may not happen all at once. It may take a couple of expansions to get there. But that’s because we think that demand for cement will grow by 50% in the next five years or so. We want to make sure we continue to meet our market share,” the AEV executive said.
Asked for an outlook for 2018, Mr. Lozano said the company will see an improvement from 2017 figures.
“The cash flows will be improving, we’ll have a lot more revenue. I don’t foresee the same challenges we’ve had in the past,” he said.
AEV booked P21.6 billion in earnings in 2017, 4% lower year on year due to higher losses and refinancing costs for its power business.

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