FDC earmarks P38B for 2014 expansion
Filinvest Development Corporation, the (FDC) investment arm of the Gotianun family, is allotting P38 billion for capital expenditures of all its businesses this year.
“With the continuing strength of the Philippine economy and the recent ratings upgrade, we are optimistic that these investments will sustain the growth of FDC,” said FDC President Josephine Gotianun-Yap.
She noted that “we are investing for medium-term growth; in 2013, FDC’s revenues grew 118 percent while net earnings grew 134 percent over 2009 levels five years ago. While the last two years still registered respectable earnings growth in the mid-teens per annum, it was muted by the investment phase undertaken the last three years.”
Around P25 billion has been allocated to its real estate business which includes Filinvest Land, Inc. as well as Filinvest Alabang, Inc., the developer of the 244-hectare Filinvest City in Alabang.
A more significant portion of the capex will be used for recurring income investment properties while the balance will be for trading assets with a portion to be used for land-banking.
Almost one-fourth of the group’s capex or P9 billion has been earmarked for the construction of FDC Utilities, Inc.’s power plant in Misamis Oriental.
The 405MW coal-fired power plant is scheduled to come online in 2016. When completed, the project will be the largest power plant in Mindanao and is expected to alleviate the region’s ongoing power crisis.
The remainder will be set aside for the hotel, banking and sugar operations. FDC Hotels, Inc., a wholly-owned subsidiary of FDC, recently commenced its 192-key, five-star Crimson Resort and Spa development in Boracay.
Gotianun-Yap said EastWest Bank is expected to see its network become mature and productive as it is already at the apex of its aggressive store expansion program in 2014. Based on the last disclosure, it had already reached 376 stores and is targeting 400 stores by year end.
“These investments will in turn drive earnings growth for the next five years,” Gotianun-Yap said.
Earlier, Filinvest Development Corporation reported a 27 percent drop in consolidated attributable net income to P701.29 million in the first quarter of 2014 from P966.34 million in the same period last year due to lower trading gains of its banking unit.
The firm said its total revenues and other income inched up P9.06 billion from P9.02 billion in the first quarter of 2013 with real estate subsidiaries raking in the sales during the period.