AGI hikes capital spending by 33% to P60-B this year
Andrew Tan-led conglomerate eyes expansion projects across core businesses
Tycoon Andrew Tan-led Alliance Global Group Inc. (AGI) is allocating P60-billion for capital expenditures (CAPEX) this year, around 33% higher than last year’s CAPEX as it prepares for a further improvement in economic activity with the anticipated increase in mobility.
“We are a conglomerate in motion. We believe that with the sectors we are in, we will very much benefit from pent-up spending resulting from the further reopening of the economy,” says Kevin L. Tan, chief executive officer, AGI.
About P50-billion of this year’s CAPEX will be spent for Megaworld’s increased development and investment activities. AGI’s real estate arm, which recorded a 36% year-on-year jump in 2021 net income, plans to offer to the market 14 new projects this year valued at P30-billion. The company also intends to launch about four townships during the year -- covering some 500 hectares of land in Metro Manila, Calabarzon and Mindanao – which will provide the fresh source of revenue for the company moving forward.
Another P4-billion will be allocated for Travellers International’s ongoing expansion projects, mainly in leisure and entertainment as eased quarantine restrictions brought its gross gaming revenues to a 26% year-on-year increase, propelled by its reinvigorated VIP business. The entire Newport City complex is now open to MICE (Meetings, Incentives, Conferences and Exhibitions) activities, while its world-renowned hotels such as Marriott Manila, Sheraton Manila, Hilton Manila, and Hotel Okura Manila, accept more staycationers, further improving footfall in the area.
Meanwhile, around P3-billion will be set aside for Emperador’s ongoing expansion projects overseas. Since the pandemic, Emperador continued to grow from strength to strength, driven by its international operations through Whyte and Mackay for whisky, and Bodegas Fundador for brandy. In 2021, the Group’s spirits subsidiary registered another record revenue of P55.9-billion and a profit of P10-billion as its premium whisky and brandy products gained further recognition in various markets around the globe.
Finally, another P3-billion will be spent by Golden Arches, which has a long-term partnership with AGI and is led by its Chairman and Founder George Yang. The company, which holds the exclusive franchise to operate restaurants in the Philippines under the ‘McDonald’s’ brand, is looking to further expand its store network as it plans to launch 45 stores this year, after opening 36 new stores in 2021.
“Our group anchored itself on stability and recovery over the last two years of grappling with the impact of the pandemic. We have since focused on renewal and revitalization — both pointing to our upbeat, more confident view of the future. This shift in mindset would not have been possible without the insights and innovations derived from such challenging times, and the affirmation that our businesses continued to stand on strong ground,” adds Tan.
In 2021, AGI recorded a stellar 132% year-on-year increase in income to P23.8-billion as consolidated revenues grew by 19% year-on-year to P152.8-billion. All of its business segments contributed to this strong growth, benefitting strongly from eased quarantine restrictions. Attributable profit stood at P16.9-billion, up by 92% year on year.
“From where we are now, there is no other way to go but move forward, laying out the foundations of a better tomorrow,” Tan stresses.
The Andrew Tan-led conglomerate has varied interests spanning real estate developments through property giant Megaworld Corporation; spirits manufacturing through Emperador Inc.; leisure, entertainment and hospitality through Travellers International Hotel Group, Inc.; quick service restaurants through Golden Arches Development Corporation (GADC), popularly known as McDonald’s Philippines; and infrastructure development through Infracorp.