Ayala Corp., the country’s oldest conglomerate, sees its annual net income breaching the P20-billion mark by 2016 as the group diversifies into new businesses such as power and transport infrastructure.
This is in turn expected 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.
Over the past three years, Zobel said the conglomerate’s foray into power and transport infrastructure was in line with the belief that these two sectors would be “critical pillars of support to the country’s growth agenda and will help contribute to sustaining it well into the future.”
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 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 has won the right to participate 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 as well as 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.
In 2013, Ayala’s consolidated net income grew by 22 percent to P12.8 billion.