Ayala Group to lower capex by 10% in 2024

The Ayala Group, which holds the country’s oldest conglomerate, is set to lower its capital expenditure (capex) for 2024 by double digits, as a number of its business units have slightly reduced their respective spending programs.

According to Ayala Corp. chief finance officer Alberto de Larrazabal, the group is looking at a 10% reduction from its P264-billion capex in 2023, with the bulk set to finance maturing loans.

“Slightly lower than last year. What’s happening is Globe is significantly lower na, [because] they’ve spent a lot already. In the case of ALI [Ayala Land Inc.], it’s still elevated but… slightly lower than last year,” he told reporters in a recent interview.

Globe Telecom Inc. is set to spend $1 billion this year and another $1 billion in 2025, after the $1.3-billion capex it earmarked in 2023. Its purchase order (PO) issuances for the past year stood at $600 million or 36% of the average annual issuances in the past five years, enabling the firm to reduce its capex.

ALI, for its part, is set to spend some P13 billion for the redevelopment of four flagship malls: Greenbelt 2, Glorietta, TriNoMa, and Ayala Center Cebu.

“‘Yung tataas ng konti [What will increase slightly] is ACEN, the renewables, but generally we’ll be slightly lower in terms of aggregate [capex] compared to last year,” de Larrazabal added.

This comes as ACEN Corporation, the group’s listed energy platform, is set to undertake a series of builds as it targets 20 gigawatts (GW) of attributable renewables capacity by 2030.

“At the individual levels, they’re going to be raising capital about the same extent that you saw last year. Part of it will be to refinance maturing loans, and then some for incremental expansions,” de Larrazabal said.

“In our case, most of our capex will be for just refinancing maturities. We will have a little bit of capex that we may have to raise towards the end of the year or borrowings towards the end of the year, but really more for preparation for next year,” he added.

The Ayala Group also includes the Bank of the Philippine Islands (BPI), AC Health, AC Logistics, AC Industrials, AC Infra, and the Ayala Foundation.

Ayala Corp. reported a P31-billion core net income in the first nine months of 2023, reflecting a 42% growth from the previous year following the double-digit increase in earnings of BPI, ALI, and ACEN. — BM/RF, GMA Integrated News