Ayala group sets P174-B capex budget for 2016

Conglomerate Ayala Corp. has set a record-high group-wide capital spending budget of P174 billion for this year to fund new power generation and property projects and boost telecommunication business.

In a briefing yesterday, AC chief finance officer Jose Teodoro Limcaoco said this year’s group-wide capital spending budget was about 34 percent higher than the P130 billion actual group spending last year.

At the parent company level, capital spending is set at around P22 billion to P23 billion, mostly to build new power facilities and other investments, Limcaoco said.

The Ayala group now has about 600 megawatts of attributable capacity across conventional and renewable platforms.  Including other projects in the pipeline, about 1,000 MW capacity will likely be operational by 2019, said Paolo Borromeo, Ayala group head of corporate strategy.

Half of the capital outlays at the parent level would go to the 552-MW thermal facility in Kauswagan, Lanao del Norte.

Limcaoco said ground-clearing operations had started for the 1,300-MW power project in Dinginin, Bataan.

In renewable energy, AC Energy’s 18-MW solar power farm, Monte Solar Energy Inc., started commercial operations in February. In conventional energy, the second 135-MW unit of its thermal plant, South Luzon Thermal Energy Corp. in Calaca, Batangas, also started commercial operations in February.  Also, the first unit of its 4×138 GN Power plant in Kauswagan is expected to be completed in the fourth quarter of 2017.

In transport infrastructure, AC Infrastructure Holdings—through Light Rail Manila Corp.—took over the operations of Light Railway Transit Line 1  last September and has since increased the number of operational light rail vehicles by about 15 percent. Its automated fare collection system under AF Payments Inc. now has more than 1.5 million “Beep” cards in circulation today.

In the meantime, the Muntinlupa Cavite Expressway (MCX) started operations in July last year and is currently serving about 22,000 vehicles per day, helping motorists save more than 30 minutes in travel time.

Earlier, property unit Ayala Land Inc. announced a capital spending budget of P85 billion for this year while telecom unit Globe Telecom has set aside $750 million.

AC has also applied for the shelf registration of about P20 billion worth of debt securities for the next three years.  Of the amount, the conglomerate plans to raise P10 billion to P15 billion this year, most likely by the third quarter, Limcaoco said.

Under the Securities and Exchange Commission rules, companies are given more time to use the shelf registration mechanism, under which securities to be issued in tranches may be registered for an offering to be made on a continuous or delayed basis for a period not exceeding three years.  The issuer is allowed to use the same prospectus for various tranches of securities offering.

Ayala posted P22.3 billion in net profit last year, breaching its profit target one year ahead of plan.