Tanduay profit more than doubles in H1

MANILA, Philippines - Tanduay Holdings Inc. posted a net income of P571.95 million in the first six months of this year, more than double the P266.28 million recorded in the same period in 2010.

In a financial report submitted to the stock exchange, Tanduay said the strong financial results were brought about by the recovery from insurance claims on finished goods damaged and lost while being shipped in 2007 and the fire that hit its Cabuyao plant in October 2010.

Net sales rose six percent to P5.96 billion from P5.63 billion while net operating income grew 21.9 percent to P751.81 million on account of the four percent increase in sales volume and a seven percent rise in average selling prices.

Cost of goods sold went up by seven percent as a result of the volume increase and the increase in the cost of alcohol and brand new bottles.

Consolidated operating expenses fell by 14 percent. Despite the increase in selling expenses by 33 percent as a result of the massive advertising campaigns of new products like the Boracay Rum and Five Years’ promotional rock band concert tours, general and administrative expenses decreased by 37 percent as last years’ figures included higher depreciation provision on the assets of a subsidiary and bank charges as a result of the pre- termination of TDI’s syndicated loan and the issuance of the P5 billion retail bonds.

The decrease in interest income by 50 percent was mainly due to lesser interest from investments and bank deposits and interest from advances to parent company due to collections.

As of end-June this year, Tanduay’s consolidated assets amounted to P13 billion, almost unchanged from that of the period ended Dec. 31, 2010.

Tanduay expects its net income to rise to P1 billion this year as revenues are seen to grow by 20 percent to P14 billion as sales volume is forecast to increase by 15 percent to 20.39 million cases.

Last year, Tanduay posted net earnings of P645 million on revenues of P11.5 billion.

The company also expects to derive additional sales from its new products like the T5 Light, T5 Extra Strong, and Embassy Whiskey.