CRISP retains AAA rating of Tanduay

MANILA, Philippines - Credit Rating and Investors Services Philippines Inc. (CRISP) has reaffirmed its ‘AAA’ issuer rating on Tanduay Distillers Inc (TDI).

Tanduay’s ‘AAA’ rating represents CRISP’s credit opinion that reflects strongest capacity by borrower to repay debt obligations and a very low probability of default.

In assigning this rating, CRISP considered the following factors:

Consistently strong financial performance - TDI’s 3rd quarter interim report this year reflected a higher net operating income of 15 percent, compared to last year’s 13 percent.

Over the years, TDI’s gross profit remained stable at over 20 percent, save for a medium dive in 2008 due to high input and energy costs. Robust sales volume and price increases, however, combined to mitigate the increases in alcohol prices and the cost of brand new bottles. During this year’s first 9-month period, gross profit stood at 25 percent, higher compared to last year’s 23 percent

During the last 10-year period, TDI’s sales revenues grew at around 7.7 percent annually while accelerating to 11 percent during the last five years. In 2010, TDI’s sales revenues of P11.5 billion has doubled its revenues in 2001.

Solid brand equity - Tanduay’s 157-year old brand commands global name recognition. Established in 1854, Tanduay is a highly regarded producer of distilled spirits in the Philippines with international awards to its credit.

To preserve Tanduay’s brand history, TDI will restore its Quiapo plant as a Heritage Site to provide insight into a bit of the country’s life and culture since its founding in 1854.

Firm market share - Tanduay commands 99.3 percent of domestic rum sales and holds the record as the second largest selling rum in the world, after Bacardi of Puerto Rico. Note that Bacardi is internationally sold while Tanduay is currently sold and promoted only in the Philippines.

Locally, Tanduay controls 34 percent of the total market for distilled spirits with a 9 percent annual growth rate. Tanduay holds a dominant position in the country’s two major islands, the Visayas and Mindanao, with a 76 percent market share that grows annually at an average of 12 percent

TDI has an extensive distribution network with exclusive distributors, sales offices and warehouses that serve 170,000 outlets nationwide.

This year, TDI introduced the Boracay Rum as part of its campaign to establish itself in the competitive Luzon market with product innovations and aggressive sales and marketing pitch.