Andrew Tan-led Alliance Global Group, Inc. (AGI) is rolling out a 5-point recovery strategy aimed at helping its various businesses quickly recover from the impact of the coronavirus pandemic.
With diversified interests in real estate, liquor, gaming and entertainment, hospitality, quick service restaurants, and infrastructure, AGI outlines its recovery strategies as follows:
1. Sustainability and Well-Being
2. Earnings Diversity
4. Financial Flexibility
“Armed with these strategies, our Group is ready to face the future with optimism and confidence, as we hurdle the current challenges and strengthen our leadership position in this New Reality. Today, businesses should pave the way in co-existing with the virus in order to survive,” says Kevin Andrew L. Tan, chief executive officer, AGI.
AGI anchors its recovery plans on a Sustainability and Well-being Strategy, in which its developments and projects will align with the United Nations Sustainable Development Goals. Megaworld’s township model remains to be the best example of sustainable real estate, with its well-contained residential communities, all Grade A and mostly LEED-certified office buildings, and well-themed malls and retail developments.
The Group also prioritizes the well-being of its 85,000-strong employees through the roll-out of various health and wellness programs, and strengthened health insurance coverages to protect the welfare of its workforce even during a pandemic.
For Earnings Diversity Strategy, AGI will further diversify and expand its revenue mix to provide for future growth without sacrificing earnings stability. Megaworld, for its part, being the largest contributor in the holding firm’s revenues, will continue to build a significant recurring income stream from its office and mall rental businesses to counter the cyclicality of its residential developments. The company has also been growing the contribution of its projects in key provincial cities throughout the country to minimize its concentration of revenues in Metro Manila.
Overseas expansion is also a priority for Emperador as its whisky business continues to gain momentum in key international markets.
For its Digitalization Strategy, AGI will further expand its digitalization efforts which started two years ago. The Group’s digital platforms have expanded their applications in various areas of operations: online real estate selling; cashless and contactless transactions for its malls, hotel operations and quick service restaurants; as well as property management, among others.
This year, Megaworld is creating AGILE Digital Ventures, a wholly-owned subsidiary that will spearhead the company’s investments into digital innovations and technology. Its first start-up project is called Pickaroo, an all-in-one, on-demand premium lifestyle app that we will be rolling out this month.
For Financial Flexibility Strategy, the Group is focused on maintaining financial discipline even as it continues to pursue aggressive expansion plans.
Last year, AGI’s consolidated net debt/equity stood comfortably at 49%, which has allowed it to cope well during the country’s strictest lockdown and ongoing fight against the coronavirus pandemic.
This year, in a bid to preserve cash, the Group has opted to cut its capital spending by almost half to P42 billion, and instead focus on projects that are already committed for completion this year.
For Adaptability Strategy, AGI, backed by its healthy balance sheet, is ready to take advantage of opportunities when they present themselves, either in land banking or business acquisitions.
This strategy has proven effective for the conglomerate even during the past periods of uncertainty in the country such as the launch of Eastwood City during the Asian financial crisis, and the launch of Travellers’ Resorts World Manila during the global financial crisis.
“All throughout those milestones in our company’s history, one underlying factor that allowed AGI to take advantage of those opportunities was its strong balance sheet, which was achieved through years of financial discipline and prudence,” explains Tan.
AGI’s business include real estate developments through property giant Megaworld Corporation; leisure, entertainment and hospitality through Travellers International Hotel Group, Inc.; spirits manufacturing through Emperador Inc.; quick service restaurants through Golden Arches Development Corporation (GADC), popularly known as McDonald’s Philippines, which is a strategic partnership with the George Yang Group; and infrastructure developments through Infracorp Development Corporation.