FILINVEST Development Corp. (FDC), the listed holding firm of the Gotianun family, has set aside up to P25 billion for capital expenditures (capex) this year and plans to beef up its war chest with a preferred share offering.
This year's budget is between P20 billion and P25 billion, FDC President and Chief Executive Officer (CEO) Rhoda Huang told reporters last week.
The amount is almost double the actual spending of P13 billion last year but lower than the P35 billion combined capex budget disclosed in April 2023.
FDC Chief Finance Officer Brian Lim said that 60 percent of this year's capex would go toward Filinvest Land projects, 15 percent each going to its power and hospitality units, and the remaining 10 percent to digitalization and other businesses.
Huang added FDC would also secure approval for a planned listing of preferred shares, with the details of the offering currently being fine-tuned to "ensure flexibility in terms of market access."
While the target amount was not disclosed, the FDC executive said the proposed listing could be done as early as this year.
"We want to see developments for the purposes of capex budget utilization," Huang said, noting that the schedule of the offering will not likely be early this year but probably late in the fourth quarter.
"We have funding in place for purposes of the budgeted capex for 2024. We will be opportunistic."
The Filinvest Group targets expanding the capacity of its Misamis Oriental solar power project to 20 megawatts (MW) from 11.5 MW and plans to add another 12 MW to its portfolio through a solar facility in Cebu.
In the hospitality business, FDC has already started the construction of a Baguio City hotel under the Grafik brand, Huang said.
In 2023, hotel subsidiary Filinvest Hospitality Corp. won a 25-year lease to develop the 5,700-square-meter property at Camp John Hay that would be managed by Chroma Hospitality Inc.
"The Grafik [Hotel] in Baguio is a new brand in terms of premium. It will open in the first quarter of 2025," Huang shared.
The conglomerate is also ramping up its digitalization push with improvements to its enterprise resource planning (ERP) systems, or software that aids businesses in managing operations, finances, and sales, among others.
"We have several ERP systems. We want to convert into just one," said Ysmael Baysa, the company's chief operating officer.
"We're also enhancing our purchasing segment, project management system, and management report, analysis, and planning system. It's a very big project that will affect practically all or most legal entities."
FDC reported last week that its consolidated earnings rose 46 percent to P12.1 billion last year, from P8.3 billion in 2022, while its attributable net income grew 58 percent to P8.9 billion from P5.7 billion.
Last year's growth drivers were the banking, real estate, and power subsidiaries, which fueled a 31-percent expansion in revenues to P92.8 billion from P71.1 billion.
In February, FDC raised P10 billion via the listing of fixed-rate retail bonds due 2026 that were issued under a P32-billion bond program. Proceeds will partially fund FDC's maturing bond redemption and capex, as well as other investments.
FDC shares fell 3 percent to P5.50 apiece last Friday amid a 1.2-percent drop for the benchmark Philippine Stock Exchange index.
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