AEV sees infrastructure as key to growth

ABOITIZ Equity Ventures, Inc. (AEV) said it is banking on infrastructure development to boost its business as it expressed interest in other public-private partnership (PPP) projects.

“Participating in more PPP projects is in line with our thrust of focusing on infrastructure to grow our business, as well as our way of supporting the country’s own economic growth,” AEV President and Chief Executive Officer Erramon I. Aboitiz was quoted in a statement on Tuesday as saying.

AEV noted that it sees “infrastructure development as a focal point in growing its business.”

The listed conglomerate also anticipates the awarding of the P35.4 billion Cavite-Laguna Expressway (CALAX) to Team Orion consortium -- which is composed of Aboitiz Land, Inc. (AboitizLand), Ayala-owned AC Infrastructure Holdings Corp. and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd.

Team Orion offered to pay the government an P11.66-billion premium for the CALAX project during last month’s bid opening, topping the P11.33 billion extended by Metro Pacific Investments Corp.-led MPCALA Holdings, Inc.

Malaysian-owned AlloyMTD Philippines, Inc. brought up the rear with a P922-million bid.

San Miguel Corp.’s Optimal Infrastructure Development, Inc., which was disqualified over a defective bid security, would have topped the CALAX auction with a premium payment of P20.11 billion.

On top of the PPP project, AEV was also awarded a bulk water supply contract in Davao.

AEV said it is “looking at more bulk water supply projects in other parts of the country.”

AEV, the holding firm of the Aboitiz family’s businesses, said it will invest around P88 billion for its capital expenditures (capex) this year, higher than the previous year’s P59 billion.

The bulk of the capex, amounting to P78 billion, has been allocated for Aboitiz Power Corp.’s (AboitizPower) investments.

The remainder will be used by its property (AboitizLand), banking (Union Bank of the Philippines, Inc.) and food (Pilmico Foods Corp.) subsidiaries.

AboitizPower is building a 300-megawatt (MW) coal-fired plant in a site straddling Davao City and Davao del Sur. The plant is scheduled to be operational next year.

Through Therma Visayas, Inc., it is also set to build a 300-MW coal plant in Cebu, which is targeted to be completed in the third quarter of 2017.

Scheduled to also start this year is the 420-MW expansion of the Pagbilao coal plant in Quezon, which will be done in partnership with TeaM Energy Corp.

AboitizPower is also planning to develop solar and wind projects to further expand its energy portfolio.

“We hope that our continued investments in energy infrastructure would help ease threats of a possible power supply shortfall for the country,” said Mr. Aboitiz.

Profit of AEV fell 23.96% to P6.098 billion in the first quarter from P8.019 billion. Revenues jumped 26.76% to P28.117 billion from P22.182 billion, while expenses climbed 51.86% to P21.038 billion from P13.854 billion.

AEV gained 45 centavos or 0.80% to close at P56.45 on Tuesday. -- Claire-Ann Marie C. Feliciano

source:  Businessworld