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FPHC boosts capex despite pandemic

First Philippine Holdings Corporation (FPHC), the Lopez group’s investment arm for the power, real estate and industrial businesses, will continue to increase capital expenditures despite the expected drop in profits this year.

During the firm’s annual stockholders’ meeting, FPHC Chairman and Chief Executive Federico R. Lopez said that, consolidated net income in the first quarter of 2020 is 13 percent lower than in the comparative period last year.

Since first quarter earnings includes only 15 days of the COVID impact which was longer in the second quarter, Lopez said “We expect 2020 RNI (reported net income) to be lower than in 2019.”

He explained that, “As with most if not all businesses, the pandemic adversely affected FPH. The power sector is experiencing lower demand for electricity combined with a drop in WESM prices.”

“With the exception of commercial office and industrial leasing which have remained relatively stable, our property sector’s revenues from residential, retail and hospitality segments have contracted versus the same period last year. The construction group is experiencing deferrals and delays in a number of construction projects slated for this year,” he noted.

However, FPHC President Francis Giles Puno said the firm will be increasing its capex for this year to P29 billion from last year’s actual capex spend of P25 billion.”

“A majority of the capex program for this year will be for the energy group (First Gen Corporation, P14 billion), followed by the property sector (P9.4 billion Rockwell Land Corporation and P2.4 billion First Philippine Industrial Park, or P11.4 billion total),” he said.

The balance of P3.6 billion is allocated for the construction sector and for FPH’s new businesses in healthcare and education.

He added that, “Despite the pandemic, we remain open to new opportunities and continue to review and evaluate potential new projects.”

Puno said “Our power generation group will continue to pursue the development of an offshore LNG terminal within the First Gen Clean Energy Complex in Batangas. This will allow LNG to be brought in using a floating storage and regasification unit or FSRU, thereby ensuring the energy security of the country, as indigenous gas supply from Malampaya is expected to become less reliable.”

FPHC’s property group is focused on completing Rockwell’s on-going residential projects, and expanding First Philippine Industrial Park’s footprint and service offerings to park locators and the roughly 66 thousand Filipinos employed there.

“Meanwhile, our manufacturing group’s expansion business beyond transformers has started to gain traction, particularly the Distribution Line Component,” he added.

Puno also said that, “We continue to support the Asian Eye Institute, which is the primary vehicle for FPH’s investments in healthcare. Asian Eye Institute is currently reshaping its business model in light of the pandemic.”

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