AGI maps out COVID19 recovery program
Tycoon Andrew Tan-led Alliance Global Group Inc. (AGI) has unveiled a five-pronged program to perk up various businesses and ensure quick recovery from coronavirus pandemic fallout.
AGI’s recovery framework, which was discussed during the company’s stockholder meeting on Thursday, is anchored on five themes: sustainability and well-being, earnings diversity, digitalization, financial flexibility and adaptability.
“Armed with these strategies, our group is ready to face the future with optimism and confidence, as we hurdle the current challenges and strengthen our leadership position in this new reality. Today, businesses should pave the way in co-existing with the virus in order to survive,” AGI chief executive officer Kevin Andrew Tan said.
“As we move forward in a uniquely challenging environment, we will continue to transform the way we do business to keep up with global developments and the ever-changing demands of clients, and to prepare for risks and crises that may come without warning,” AGI chair Andrew Tan said.
“But as we make incremental shifts in our operations to create added value for our customers, we will continue to further strengthen our core businesses by unlocking the potential of our employees, harnessing what technology can offer, and becoming more efficient in maximizing our businesses’ diverse potential,” he added.
On the sustainability and well-being theme, the group seeks to align its developments and projects with the United Nations Sustainable Development Goals. Megaworld’s township model aims to exemplify “sustainable” real estate development.
The group also vowed to prioritize the well-being of its 85,000 employees through the rollout of various health and wellness programs, alongside a strengthened health insurance protection plan.
To diversify earnings, AGI seeks to expand its revenue mix to provide for future growth without sacrificing earnings stability.
Megaworld, being the largest revenue contributor, is tasked to continue building a significant recurring income stream from its office and mall rental businesses to counter the cyclicality of its residential developments. The company has also been growing the contribution of its projects in key provincial cities to minimize concentration of revenues in Metro Manila.
Overseas expansion is also a priority for beverage arm Emperador as its whisky business continues to gain momentum in key international markets.
On digitalization, the group expanded applications in various areas of operations: online real estate selling; cashless and contactless transactions for its malls, hotel operations and quick service restaurants; as well as property management, among others.
Megaworld has created a new unit AGILE Digital Ventures, to spearhead digital investments. Its first start-up project is called Pickaroo, an all-in-one, on-demand premium lifestyle app.
On financial flexibility strategy, the group vowed to uphold financial discipline even as it pursues aggressive expansion plans.
This year, the group has opted to slash its capital spending by almost half to P42 billion, by focusing on projects that are already committed for completion this year.
On adaptability, AGI vows to be on the lookout for new opportunities, whether in landbanking or business acquisitions.
Previous crises did not deter the group from pursuing big-ticket projects. For instance, Eastwood City was launched during the Asian financial crisis, while Travellers’ Resorts World Manila was unveiled during the global financial crisis.
“All throughout those milestones in our company’s history, one underlying factor that allowed AGI to take advantage of those opportunities was its strong balance sheet, which was achieved through years of financial discipline and prudence,” said Kevin Tan.
Outside of Megaworld, Emperador and Travellers, AGI’s portfolio also includes Golden Arches Development Corp., popularly known as McDonald’s Philippines, which is a strategic partnership with the George Yang Group; and infrastructure developments through Infracorp Development Corp.
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