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Ty conglomerate sets ‘record’ budget for 2013

Posted on January 30, 2013 10:36:46 PM [ BusinessWorld Online ]
GT Capital Holdings, Inc. plans to spend as much as P40 billion this year -- a record figure and more than double the amount it actually spent in 2012 -- mostly for its property and power units as it aims to achieve double-digit sales growth, the company’s top official told reporters yesterday.
“Our capex (capital expenditures) is P35-40 billion, mostly for property and power. We have expansion plans for power, and we also have lots of property projects,” Carmelo Maria L. Bautista, GT Capital president, said on the sidelines of the Philippine Investment Summit 2013 at the Makati Shangri-La hotel when asked for the company’s spending plans for 2013.
“This is record spending, higher than last year which was P15 billion,” Mr. Bautista added.
He declined to elaborate on the holding firm’s specific plans for power and property, held under unlisted units Global Business Power Corp. and Federal Land, Inc., respectively.
Federal Land had said earlier this month that it was also ramping up spending this year, allotting P12 billion -- or more than a third over 2011 expenditures -- for the construction of condominiums, as well as other retail and office developments.
An analyst said GT Capital’s aggressive bid to boost spending this year was to be expected amid a booming local economy.
The government is widely expected to report full-year 2012 economic growth today that will top the higher end of its 5%-6% target. Gross domestic product grew by about 6.5% in the nine months to September last year, already surpassing that goal.
“I think sitting on your cash and not expanding in the midst of a growing economy would be a disservice to your shareholders. I think it’s a right move. The economy is doing well and I think it is expected to continue do so this year. If you want return on your capital, you have to invest,” Jose A. Vistan, Jr., research head at AB Capital Securities, Inc., said in a telephone interview yesterday when asked to comment on GT Capital’s 2013 capex.
Asked on sales growth this year, Mr. Bautista said: “It’s safe to say double-digit growth.”
“Drivers will be the country’s robust macroeconomic fundamentals. All our five sectors (units) should be up,” he said without elaborating.
Comparative figures were not immediately available, as GT Capital has yet to release its full-year 2012 financial report.
GT Capital is the holding firm for the businesses of the Ty family. It was the first firm to conduct an initial public offering in 2012, raising P21.6 billion in fresh funding.
Aside from real estate and power, the company has investments in three other sectors, namely: in banking (Metropolitan Bank & Trust Co.), life insurance (AXA Life Insurance Corp.), and automobiles (Toyota Motor Philippines Corp.)
GT Capital more than doubled its net income to P6.86 billion as of September last year from P2.64 billion in the same nine months in 2011, buoyed by gains from the consolidation of its power business, a bigger share in the net income of its units, and nonrecurring income from its property subsidiary.
In the same comparative periods, revenues -- consisting mainly of fees, equity in net income of associates, as well as finance and other income -- tripled to P16.70 billion from P5.37 billion, while costs and expenses grew more than threefold to P9.71 billion from P2.66 billion.
Shares of GT Capital added P1 or 0.15% to close at P680 apiece yesterday from P679 last Tuesday. -- Franz Jonathan G. de la Fuente       
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