Tobacco Business Lifts LTG Income In 9 Months

Source from:  Business Mirror 11/14/2019

LT Group Inc. (LTG), the holding firm of most of the businesses of tycoon Lucio Tan, said its attributable net income rose  17 percent to  P14.72 billion from  P12.57 billion reported last year, as its tobacco business continued to expand.

Lender Philippine National Bank (PNB) contributed 25 percent of the total income to P3.64 billion,  the tobacco business accounted for P9.57 billion or 65 percent of total income, and Eton Properties Philippines Inc.  contributed P626 million or 4 percent.

Meanwhile, Tanduay Distillers Inc. accounted for P509 million or 3 percent, while Asia Brewery Inc. provided P254 million or 2 percent.  The company’s 30.9-percent stake in Victorias Milling Co. Inc.  accounted for P148 million or 1 percent.

PNB’s net income under the pooling method was down 15 percent to P6.52 billion from P7.63 billion last year with the absence of large gains from the sale of real and other properties acquired.  Excluding the gains from Real and Other Properties Acquired (Ropa), the bank’s core income was at P6.21 billion, 33 percent higher than last year’s P4.65 billion.

LTG’s tobacco business under PMFTC Inc., the combined company of Philip Morris Philippines and Tan’s Fortune Tobacco, reported a net income of P9.61 billion  40 percent higher than the P6.86 billion last year. The improvement in the earnings is largely attributed to the volume mix in favor of premium Marlboro, it said.

“LTG is not against tax increases, but believes that the hikes should be moderate.  Continual price increases to pass on higher excise taxes may result in further volume drops,” it said.

The industry’s volume was estimated at 109 billion sticks in 2012 and declined to an estimated 73 billion sticks in 2018, or a decrease of 33 percent over a six-year period.

Net income of Eton, the property developer, doubled to P629 million from last year’s P314 million.  Total revenues were 29 percent higher with higher real-estate sales and leasing revenues.

Liquor arm Tanduay’s income fell 28 percent to  P518 million from P722 million last year. Revenues from liquor were 2 percent lower due to the 4-percent drop in volume which was partially offset by the increase selling prices by an average of P14 per case.

Meanwhile, revenues from bioethanol were 32 percent higher as volume increased by 18 percent.

As of end-September, Tanduay’s  nationwide market share for distilled spirits was at 29 percent, higher than last year’s  28.3 percent.  In the Visayas and Mindanao regions where most of Tanduay’s  sales are generated, market share was at 68.8 percent.

Beverage arm Asia Brewery’s earnings for the period was also down 13 percent to P254 million from P291 million last year as the company’s operating expenses were 9 percent higher as the company spent more on advertising and promotions.

Revenues increased by 9 percent due to higher volumes of energy drinks, soymilk and bottled water.   Enditem