Aboitiz group sets 2024 capex budget at P153 billion

CEBU-BASED Aboitiz group has earmarked P153 billion for its capital expenditure (capex) budget this year, as the conglomerate plans to expand its renewable energy (RE) portfolio and other businesses.

The 2024 capex, over two times higher than the P65 billion spent capex last year, will be used for RE projects in the pipeline, as well as further investments to develop the retail banking business, support utility infrastructure projects, and expand the food group, the Aboitiz group said in a statement on Thursday.

Of the total capex budget, 48%, or P73 billion, is allotted to Aboitiz Power Corp.’s (AboitizPower) RE projects, 29% or P44 billion will be for the Aboitiz Group’s holding firm Abotiz Equity Ventures, Inc. (AEV), and P25 billion is for the group’s infrastructure arm Aboitiz InfraCapital, Inc. (AIC).

Almost P4 billion is allotted as capex budget for food subsidiaries Pilmico and Gold Coin Group, while P3.3 billion is earmarked for AboitizLand, Inc.

The group did not specify the allocation for its retail banking arm Union Bank of the Philippines, Inc.

“Our substantial increase in capital expenditures is a clear reflection of our commitment to renewable energy,” Aboitiz group President and Chief Executive Officer Sabin M. Aboitiz said.

AboitizPower has over 1,000 megawatts (MW) of disclosed projects in construction and development. It aims to reach 4,600 MW within the next decade.

These projects include the 159-MW peak (MWp) Laoag Solar Power Project in Aguilar, Pangasinan; the 17-MW Binary Geothermal Power Project in Tiwi, Albay; the 173-MWp Solar Power Project in Calatrava, Negros Occidental; the 45-MWp Solar Plant in Armenia, Tarlac; and the 212-MWp Solar Power Project in Olongapo, Zambales.

AboitizPower also aims to commence work on various RE projects this year such as the 89MWp solar project in San Manuel, Pangasinan, and a 50-MW wind plant in Camarines Sur.

For the holding company, AEV will use P40 billion of its capex budget for the acquisition of domestic bottler of Coca-Cola products, Coca Cola Beverages Philippines, Inc. (CCBPI).

The joint acquisition involving AEV and CocaCola Europacific Partners Plc. (CCEP) is valued at $1.8 billion. The deal was completed on Feb. 23.

AEV has 40% stake in CCBPI, while the remaining 60% stake is held by CCEP.

Meanwhile, infrastructure unit AIC targets to explore new projects and synergies within the Aboitiz group.

Some of AIC’s projects in the pipeline include the upcoming groundbreaking of its TARI Estate development in Tarlac, and the ramping up of production for the Davao City Bulk Water Supply Project.

Other plans include enhancing the Mactan-Cebu International Airport, improving nationwide digital connectivity, and doing major maintenance works and purchasing of critical spares under AIC’s cement business led by Republic Cement.

For the food business, the capex budget will be used for the agribusiness expansion projects of Pilmico and Gold Coin Group. These projects include the ongoing Yunnan feedmill in China, as well as the Long-An feedmill in Vietnam, both of which are expected to be finished in the second quarter.

Yunnan Mill will be capable of producing up to 150,000 metric tons (MT), while LongAn feedmill will have a production capacity of 200,000 MT with a potential to expand to 300,000 MT.

The group said the capex budget will also be used to improve its meats business by repopulating breeder farms, developing channels to bring up plant utilization of its Tarlac MeatMasters meat-cutting facility, and reinforcing its meats organization.

For the real estate business, AboitizLand will use the capex budget to support ongoing projects such as the planned launch of the second building of The Strides at LIMA. The company aims to focus on harvesting its existing land bank and maximizing the value of various real estate holdings across different Aboitiz business units including the economic estates.

For the banking business, UnionBank’s capex budget will be used for investments in technology refresh, cybersecurity, and system integration.

“By the end of March 2024, Union Bank is set to complete the integration of Citibank’s consumer banking business in the country that it acquired in 2022,” the group said.

“The deal included an asset and liability transfer, the sale of shares in Citicorp Financial Services & Insurance Brokerage Philippines, Inc., and real estate shares in Citibank Square Building in Quezon City,” it added.

On Thursday, AEV shares rose by 1.08% or 50 centavos to P47 per share. AboitizPower stocks gained by 0.14% or five centavos to P36.90 apiece. UnionBank shares were unchanged at P43 each. —