Ayala Turns to Power, Schools for Growth as Philippines ExpandsCecilia Yap
Ayala Corp. will accelerate spending on power plants and infrastructure and may build schools as the Philippines’ oldest family business group ventures into new businesses, according to Chairman Jaime Augusto Zobel.
“We wanted new opportunities that had scale, that would be aligned to the national development agenda,” Zobel, 55, told reporters in Manila today. “We think that we now have the balance sheets to be able to contribute in a significant way” by bidding for projects and taking partners, he said.
The holding company is seeking to boost profit by more than half to at least 20 billion pesos ($445 million) in two years and will spend a record this year, taking advantage of accelerating economic growth, Chief Financial Officer Delfin Gonzalez said in March. The 180-year-old company owns the nation’s largest property developer and the biggest bank by capital as well as its second-largest telecommunications company and one of Manila’s two water providers.
Ayala, which started as Casa Roxas in 1834, has earmarked $1 billion in investments in power and infrastructure from 2012 to 2016 amid increasing demand for energy, roads and railways, according to a presentation posted on its website. The Philippines should remain among the five fastest-growing economies globally this year, according to Bloomberg surveys, as President Benigno Aquino bolsters infrastructure spending.
The holding company, which started as a distiller, plans to bid for a toll road and an elevated-railway system worth a combined 98.5 billion pesos that the government will auction this year, and may do so with partners, Zobel said. It is more than halfway through its target of building 1,000 megawatts of power-generating capacity, he said.
“Education is of interest to us, and we’d like to participate in that space,” Zobel said.
Ayala Corp. shares fell 0.8 percent in Manila today, before the briefing. The stock has risen 17 percent this year. Ayala and three of its units make up about a fifth of the nation’s benchmark stock index, according to data compiled by Bloomberg.
Profit at Ayala rose 22 percent to 12.8 billion pesos last year, the fastest growth since 2010, according to data compiled by Bloomberg. Capital spending will rise to a record 187 billion pesos this year, with more than a third allotted to its property unit, Gonzalez said in March.