Aboitiz targets improved contribution mix from business units

MANILA, Philippines — Aboitiz Equity Ventures (AEV) is eyeing to increase the income contribution of its infrastructure, food and financial services business segments to 10 percent to 20 percent, driven by its potential for growth.

“Essentially, what we really want to see is that subsidiaries like food, financial services and infrastructure would have become 10 to 15 percent of each (of) them even up to 20 percent and power will dominate the contribution,” AEV chief finance officer Manuel Lozano said in an interview.

In the first half of the year, power accounted for 67 percent of the total income contribution from AEV’s strategic business units. This was followed by banking and financial services with 24 percent, food with six percent, infrastructure with two percent and land with one percent.

Lozano said by 2025, the power business should be contributing less than 50 percent of the total income.

“That’s not easy because power is also trying to grow. That means the others need to grow fast,” Lozano said.

“I think infra can because it’s starting from a low base,” Lozano added.

He emphasized that at present, the company’s cement business is mainly driving the infrastructure arm.

“It’s going to take awhile (for infra business to grow).The airports, hopefully, if we complete that it will be big for us,” Lozano said.

In September, Aboitiz InfraCapital (AIC) received the original proponent status from the Civil Aviation Authority of the Philippines for the expansion and operations of New Bohol Panglao airport.

The company was also granted the OPS for the Laguindingan airport in Misamis Oriental in March.

Both proposals will have to undergo a Swiss challenge once it gets the approval of the National Economic and Development Authority (NEDA).

At present, Lozano said they are working on finalizing the paperwork for the two airports, noting that they are regularly in contact with both the NEDA and the Department of Transportation.

“We’re hoping that it will happen soon. We’ve been working on that goal back and forth trying to perfect that document,” Lozano said.

Apart from the Bohol and Laguindingan airports, AIC is also part of the super consortium which proposed to rehabilitate, operate, and expand the Ninoy Aquino International Airport.

In addition to airports, Lozano also expressed optimism for the infrastructure business’ growth due to its commitment to roll out common telecommunications towers.