Tanduay profit surges 86% to P422M

Tanduay Holdings Inc. of tobacco and beer magnate Lucio Tan reported an 86-percent growth in its net profit for the first half this year to P422.06 million, driven by higher sales despite the increase in its selling prices.

In a financial report submitted to the Securities and Exchange Commission, the company said its net sales rose 18 percent to P3.7 billion. Sales volume increased slightly by three percent on account of weak first quarter results and higher inflation rate caused by the increase in global crude oil prices.

For the second quarter alone, Tanduay’s net earnings jumped 43 percent to P222 million, exceeding the projected P162-million income for that period. Sales volume for the quarter under review reached 4.3 million cases, or an improvement of 16 percent from the same period a year earlier. On a year-to-date basis, sales volume hit 7.8 million cases, slightly higher from 7.6 million cases a year ago.

Cost and expenses, however, went up by 11 percent to P3.12 billion from P2.81 billion. Earnings per share, on the other hand, almost doubled to P0.13 from only P0.07.

To improve cost-efficiency and expand operations, Tanduay has set aside between P500 million to P1 billion for the establishment of a new bottling plant in Cagayan de Oro. The company is in the process of acquiring majority control of six liquor companies, namely Asian Alcohol Corp., Absolute Chemicals, Dyzum Distillery Inc., Cabuyao Packaging Corp., Flor De Cana Shipping Inc. and Negros General Services.

As of end-June this year, Tanduay has already paid its investments in Asian Alcohol, Absolut Chemicals and Cabuyao Packaging using funding from local banks.

The company is currently building a fourth plant, in addition to its facilities in Negros, Laguna and Quiapo. The new plant is expected to produce about 40,000 cases of liquor per day.

To continue growing, Tanduay is looking at new markets that will expand its customer base. It is also aggressively shopping around for potential acquisitions that will grow its business and improve shareholder value.