Posted on March 06, 2012 09:11:58 PM [ BusinessWorld Online ]
CONGLOMERATE ALLIANCE Global Group, Inc. is looking to spend some P35 billion this year as it moves to hit a 20% profit growth target, the company’s top official said yesterday.
“Our group’s total capital and development expenditures will be around P35 billion. Most of this will go to real estate and tourism,” Andrew L. Tan, Alliance Global chairman and chief executive officer, told reporters in a chance interview yesterday.
Mr. Tan said this year’s capex will definitely be higher than the amount the company spent for 2011; however, he was unable to give an exact figure for last year’s capex.
For 2012, Alliance Global will be tapping its cash reserves to fund spending.
“This will be mostly from internally-generated funds, because right now we are still holding cash close to P70 billion. We have more than enough funds as of the moment. We are very liquid,” Mr. Tan said.
“For earnings, we are looking to close to 20% net income growth this year for Alliance Global Group,” Mr. Tan noted.
This compares against the 35% profit growth target for 2011.
So far, the firm has reported P12.3 billion in nine-month earnings for 2011, up 62.6% from yearago levels.
A bulk of the holding company’s net income for 2012 is expected to be contributed by middle-income developer Megaworld Corp., hotel operator Travellers International Hotel Group, Inc., and liquor unit Emperador Distillers, Inc., Mr. Tan said.
Flagship unit Megaworld, for its part, is also expected to incur a double-digit net income growth of around 10% this year, Mr. Tan added.
Tourism will be Alliance Global’s primary focus for this year, he said.
“We believe that tourism will really be the driver of growth for our country in the next years. It is our goal that we will have 5,000 hotel rooms within the next five years, and we hope to help bring in around a million tourists this year,” Mr. Tan said.
At present, Alliance Global has three existing hotels in its Resorts World Manila integrated tourism estate. Alliance Global shares fell by 2.0% to P11.78 yesterday. -- FJGDLF
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