GTCAP PLANS TO SPEND P52 BILLION CAPEX | Marvin Germo

GTCAP PLANS TO SPEND P52 BILLION CAPEX

By: Marvin Germo | April 1, 2019

Average Capital Expenditure For GTCAP

GT Capital Holdings, Inc. allots P51.7 billion as capital expenditure this 2019. This plan brings back the firm to its P50-60 billion average capital expenditure from over P100 billion budget last year. In 2018, GTCAP spent about P112 billion CAPEX, P60 billion of it accounted the stock rights offered through Metropolitan Bank & Trust Company. As we enter the second quarter of the year, what are the plans of GTCAP for this new budget allocation?

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Business Expansion

The P51.7 billion capital expenditure allocation will go to automotive and property business unit expansion of GTCAP. The listed conglomerate disclosed that the expenditure will be made at a parent level, of which P27.8 billion will be invested for its recent partnership with a used car auction house and other investments that would lead to a successful 2019 for the firm. The budget will also be used to for land banking purposes, office buildings construction, new models of vehicles, and logistics expansion. Fruitful years are coming for GTCAP as it focuses on the expansion of its major segments.

Recent Partnership With An Auction House

GTCAP has recently established a partnership with Japan Bike Auction Co., Ltd in order to create JBA Philippines. The formed partnership will manage the operations of the used cars auction and is expected to commence by the third quarter of 2019. The firm noted different reasons why an auction house is vital for its automotive business. This includes extending the value chain for parts and maintenance, financing, and insurance. The partnership will embed an online platform for the convenience of bidding of used cars and transparency of repossessed assets.

Budget Allocations

The P51.7 billion capital expenditure budget is divided into different allocations. P27.7 billion will be allocated to the auction house as this is the major project of the firm this year. P12 billion will be spent for Federal Land, Inc. for the purpose of land banking and establishment of more office buildings. This year, the firm is set to launch about 5 to 8 new projects this 2109 under the Federal Land. P2.3 billion is for the firm’s property unit, Property Company of Friends. P6.8 billion is assigned to spend for Toyota Motor Philippines for logistics expansion and new models this year. P300 million is for the renovation of the firm’s dealership unit, Toyota Manila Bay Corp. P2 billion is for the Metrobank’s system upgrade. And lastly, P200 million for AXA’s system improvement.

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