JG Summit sets 2019 capex at P87.5 billion
Credit to Author: ANGELICA BALLESTEROS, TMT| Date: Fri, 31 May 2019 16:24:11 +0000
LISTED JG Summit Holdings Inc. is raising its capital expenditures (capex) by 28 percent to P87.5 billion for this year from the P68.3 billion spent in 2018 to fund the expansion plans of its subsidiaries.
At a briefing on the sidelines of the Gokongwei-led conglomerate’s annual stockholders’ meeting on Thursday, JG Summit President and Chief Executive Officer Lanca Gokongwei said that of the amount, P32 billion would go to JG Summit Petrochemicals Group, P27 billion to Cebu Air Inc., P18 billion to Robinsons Land Corp. and P9 billion to Universal Robina Corp.
The remainder would be shared by other subsidiaries, he added.
Gokongwei also said JG Summit was investing $1 billion over the next few years for its petrochemicals unit to support the latter’s recovery after posting a net loss of P730.40 million in the first quarter.
That amount, he added, would be used expand the capacity of its polypropylene and bimodal polyethylene facilities, as well as to venture into producing butadiene, as well as benzene, toluene and xylene (BTX). This would make the subsidiary the first to manufacture butadiene and BTX locally.
Half of the total amount has been spent, according to him.
“[This] should add to our value chains and put us into better position to benefit from recovery, which we anticipate to happen in 2020 [and] 2021,” Gokongwei said.
For his part, Robinsons Land President and CEO Frederick Go earlier expressed optimism that 2019 would be a better year on expectations that residential sales would pick up as it would start recognizing revenues from its project in Chengdu, China.
The property unit will launch this year P12 billion worth of residential projects, excluding two upscale ones in partnership with the Hong Kong Land Group and Shang Properties Inc. In total, these six project will add more than 4,000 units to Robinsons Land’s total portfolio.
The real-estate developer is also set to build Montclair, a 200-hectare township in Pampanga province, in a bid to take advantage of the continued infrastructure development taking place there.
Go said his firm already finished the master plan for the project, adding that this would include hotels, commercial spaces, residential projects and industrial parks.
Universal Robina President and CEO Irwin Lee said the food-and-beverage arm aimed to grow by high single-digits this year, with its optimism fueled by the strong first-quarter performance it registered this year.
On Robinsons Bank Corp., JG Summit aims to aggressively expand it and make it a universal lender over the next five years. The firm needs to comply with the P20-billion capital required by the Bangko Sentral ng Pilipinas for it to be considered a universal bank.
The bank’s capital is currently at P16 billion.
Gokongwei said the conglomerate targered to raise the number of Robinsons Bank branches to 200. It is also in preliminary talks with other companies to jointly grow the lender.
JG Summit shares rose by P1.50 or 2.45 percent to finish at P62.60 apiece on Friday.
The post JG Summit sets 2019 capex at P87.5 billion appeared first on The Manila Times Online.