LISTED CONGLOMERATE JG Summit Holdings, Inc. is ramping up capital spending this year in line with expansion plans in place for its real estate and aviation units, an official said.
The Gokongwei-led firm has pegged capital expenditure at P52.87 billion for 2012, up 79.89% from the P29.39 billion spent in 2011, Bach Johann M. Sebastian, JG Summit senior vice-president and corporate planning head, told BusinessWorldin an e-mail.
A bulk of JG Summit’s will be accounted for by the company’s real estate arm Robinsons Land Corp. and low-cost airline operator Cebu Air, Inc., Mr. Sebastian said.
Robinsons Land will be spending P19.25 billion this year, a 73.74% increase from the P11.08 billion spent last year, the e-mailed data showed.
Robinsons Land, which hiked its full-year net profits by 10% to P3.97 billion last year, earlier said it will be sourcing its capex from cash operations and debt, with more than 60% of the funding going to malls, office buildings, and hotels, and the remainder for condominiums and other housing units.
Cebu Air, for its part, nearly tripled its budget to P12.50 billion this year versus only P4.22 billion last year.
“Funding for Cebu Air will contribute to the growth of its fleet acquisitions this year,” Mr. Sebastian said in a separate telephone interview.
Cebu Air, which operates budget carrier Cebu Pacific, aims to expand its fleet to 47 aircraft by the end of 2014 in line with plans to embark on long-haul flights within the year.
Other JG Summit units, particularly its unlisted petroleum and banking firms, will also ramp up spending this year.
JG Summit Petrochemical Corp., the unlisted petroleum subsidiary of JG Summit, has pegged its 2012 budget at P15.54 billion, up by 88.82% from P8.23 billion in 2011.
JG Summit Petrochemical aims to open the country’s first naphtha cracker raw material factory in Batangas City in the third quarter next year, in a bid to drive down raw material production costs according to earlier reports.
Robinsons Bank Corp., for its part, will be spending P390 million this year, more than double the P190 million figure earmarked in 2011.
Listed food and beverage firm Universal Robina Corp. will be spending P4.56 billion this year, unchanged from its last year’s capex.
JG Summit, established in 1990, is the Gokongwei family’s holding company for various interests. JG Summit shares were traded unchanged on Friday at P28 apiece. -- Franz Jonathan G. de la Fuente, Business World Online
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