GMA Network, Inc. (Photo credit: Wikipedia)San Miguel Corp. (SMC) is betting big on the airline space with plans to invest in a regional carrier in line with its goal to double annual revenues to P1 trillion in the next few years through expansion beyond its traditional food and drink business.
At the company’s annual stockholders meeting yesterday, SMC president Ramon S. Ang said the conglomerate is looking at several airlines in the region as it further builds up its position in faster-growing and high potential industries such as power, mining, infrastructure, travel and possibly, broadcasting.
“We’re looking at several opportunities that will allow us to create synergy within the airline sector.
We’re planning to invest in a regional airline, a move that will allow us to eventually fly to Europe and other countries,” said Ang, who was credited by management for steering SMC to greater heights.
SMC acquired a substantial stake in flag carrier Philippine Airlines in April in a deal worth around $500 million. The conglomerate plans to support PAL’s fleet modernization and expansion program.
Ang said PAL is now in talks with aircraft manufacturers to acquire at least 100 new planes in the next five to seven years in line with its bid to turn around Asia’s oldest airline in two years. To achieve its goal, the company is seeking to restructure its operations to a low-cost carrier.
He said the group is also seriously considering breaking into the broadcasting industry but declined to give more details, pointing out they are open to participating in government auctions to spur faster growth. Ang earlier said they are open to acquiring state-owned stations IBC 13 and RPN-9.
When asked whether GMA Network Inc. is on its radar, Ang said: “We’d rather not comment. We’d like to keep things confidential.”
The group of telecommunications magnate Manuel V. Pangilinan earlier expressed interest to acquire GMA, which is keeping its options open with respect to the possibility of putting it up for sale.
SMC chairman and chief executive officer Eduardo Cojuangco Jr. said that while the group’s P1-trillion sales target may be ambitious, this can be done through further acquisitions, pointing out that the group’s infrastructure projects will begin generating significant growth by 2015.
“From the period 2011 to 2015, we expect San Miguel to post strong double-digit compounded annual growth rate, driven primarily by the earnings contributions from our new businesses, mainly power and Petron,” Cojuangco said.
In 2011 alone, consolidated sales revenues reached P536 billion, more than double the previous year’s P246 billion.
New businesses contributed over P345 billion or an estimated 63 percent of the groupwide sales last year.
Expected to contribute significantly to SMC’s bottomline are investments in Exxon Mobil’s downstream oil business in Malaysia and its stake in the firms operating Skyway and South Luzon Expressway.
http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=817225
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