Ayala Corp. chair Jaime Augusto Zobel de Ayala
MANILA, Philippines—The country’s oldest conglomerate, Ayala Corp., sees its annual consolidated net income breaching the P20-billion mark by 2016 alongside its diversification into new businesses such as power and transport infrastructure.
This is in turn seen to jack up the conglomerate’s return on equity to mid-teen levels, Ayala chair and chief executive officer Jaime Augusto Zobel de Ayala said during the company’s stockholders meeting on Friday.
Ayala has so far committed over $400 million in equity to a pipeline of energy-related projects, both through acquisitions and greenfield projects, so far assembling nearly 1,000 megawatts in gross generating capacity.
“We continue to be on the lookout for more potential investments and we would be prepared to deploy another $400 million in this space moving forward,” he said.
In transport infrastructure, the Ayala group is involved in two of three projects bid out by the government under the public-private partnership program. These are the Daang Hari toll road, which is expected to be completed within this year, and the automated fare collection system (ACFS), a payments system that will start with the rail operations in Metro Manila but with a potential to expand into various retail areas. The ACFS project is a partnership with the First Pacific group.
“We continue to work on other PPP bids which are due in the second quarter of 2014, particularly the Cavite-Laguna Expressway, the LRT-1 (Light Railway Transit 1 extension to Cavite) and the Southwest Integrated Transport Terminal,” company president and chief operating officer Fernando Zobel de Ayala said.
Overall, he said, the group was optimistic that the growth momentum in 2013 would be sustained this year. “Our earnings outlook for each of our key business units remains upbeat with mostly double-digit earnings growth expected in 2014. This puts us in line with our aspiration to surpass the P20-billion net income level by 2016,” he said.
For 2014 alone, the Ayala group expects to fork out P187 billion in capital expenditures, a record-high amount for the conglomerate. The bulk of the capital outlay will go to Ayala Land’s expansion, Globe Telecom’s network improvement and Manila Water’s service improvements alongside expansion in power and transport infrastructure.
In 2013, Ayala’s consolidated net income grew by 22 percent to P12.8 billion, resulting in a return on equity of 10.2 percent.
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