JG Summit increases capex budget to P53B

MANILA, Philippines - Gokongwei flagship firm JG Summit Holdings Inc. has increased its planned capital spending this year by nearly 80 percent to P52.87 billion, reflecting its bullish stance on the local economy.

In a disclosure to the Philippine Stock Exchange yesterday, JG Summit said most of the programmed capital budget will go to the continued expansion of its real estate, airline and petrochemicals businesses.

Around P13 billion has been earmarked for the development of new malls, residential and office projects under property unit Robinsons Land Corp.

Another P12.5 billion will be used to support Cebu Air’s fleet expansion, nearly three times the P4.22 billion spent a year earlier. The no-frills airline had signed lease agreements for four Airbus A330s as it prepares to extend its reach to new routes such as Europe, United States and the Middle East.

JG Summit Petrochemical Corp. needs around P15.54 billion to finish the development of the country’s first naphtha cracker plant amounting to between $700 million to $800 million. Slated for completion by late 2013, the project will produce 320,000 metric tons of ethylene.

Food unit Universal Robina Corp., meanwhile has set a P4.56-billion capital expenditure program this year mainly to expand its branded consumer food operations. This would involve mainly snack foods production facilities in the Philippines and biscuits production plants in Vietnam and Thailand.

About P390 million has been allotted for Robinsons Bank or more than double the P190 million spent a year before.

JG Summit jacked up its net income 32 percent last year to a record P21.59 billion, buoyed by gains from the sale of its telecom unit.

It booked P13 billion from the divestment of its stake in Digital Telecommunications Philippines Inc. (Digitel) to Philippine Long Distance Telephone Co. The landmark deal, valued at P69.2 billion, created a telecommunications giant with a market share of about 70 percent.