Tanduay profit falls 11% in 2010

MANILA, Philippines -  Lucio Tan’s liquor unit Tanduay Holdings Inc. posted a net profit of P508.67 million last year, down 11 percent from P573.2 million a year earlier as higher sales were offset by higher costs.

Tanduay president Wilson Young said net sales rose 15 percent to P11.76 billion mainly due to the seven percent growth in sales volume from 17.91 million cases to 19.25 million cases.

Young said election-related spending and an increase in selling prices boosted the company’s sales.

Gross income jumped 43 percent to P2.66 billion from P1.86 billion.

Costs and expenses, meanwhile, grew nine percent to P9.1 billion from P8.34 billion as the cost of alcohol and brand-new bottles went up.

Selling expenses climbed as a result of the massive advertising campaigns of new products and promotional tours highlighted by “Tanduay’s First Five” participated by the country’s five most popular bands.

On Feb. 12, 2010, Tanduay Distillers Inc. completed a P5-billion bond offering. Using the proceeds of the bonds, Tanduay pre-terminated and fully paid the outstanding balance of the syndicated loan of P4.2 billion with an effective interest rate of 9.68 percent.

Tanduay Distillers controls over 95 percent of the local rum market and is the second largest seller of rum in the world next to Bacardi of Puerto Rico. It operates four liquor bottling plants with a total capacity of about 120,800 cases per day and operates two distillation plants.