LT Group income surges to P3.57 B in H1

MANILA, Philippines - LT Group Inc., the holding company of tycoon Lucio Tan, grew its net income for the first half by 65 percent to P3.57 billion, mainly driven by higher contributions from its banking, liquor and property businesses.

Its tobacco business remained affected by the impact of illicit trade.

Banking arm Philippine National Bank contributed P2.155 billion or about 60 percent of groupwide earnings.

Asia Brewery Inc. pumped in P523 million or 15 percent of the total, while the tobacco business contributed P423 million or 12 percent.

Tanduay Distillers Inc., meanwhile, accounted for P179 million or five percent, while Eton contributed P113 million or three percent.

PNB reported a net profit of P4.1 billion, 32 percent more than the P3.12 billion posted a year ago on the back of higher net interest income, service fee as well as other income.

Net Interest Income was four percent higher year-on-year while service fee income grew by 18 percent.  Other income was also up due to ROPA (real and other properties acquire) sales worth P1.8 billion.

Asia Brewery posted net earnings of P524 million, down 17 percent from P629 million a year earlier.  Despite the income drop, the company’s  brands such as Cobra energy drink, Absolute, Summit and Tanduay Ice continue to be market leaders.

“However, the intense competition in the beverage market affected volumes and margins,” LTG said.

The tobacco business, through  Philip Morris Fortune Tobacco Corp., earned P425 million, 40 percent lower than the P713 million reported in the same period a year ago.

PMFTC is  the merged entity between Philip Morris and Fortune Tobacco Corp.

Equity in net earnings from the 49.6 percent stake in PMFTC amounted to P420 million, down P687 million year on year. 

“The illicit trade continues to adversely affect the profitability of the cigarette business,” LTG said.

On the other hand, Tanduay Distillers posted net earnings of P179 million, a turnaround from the P172 million loss incurred in the same period last year.

According to Nielsen, TDI’s market share increased to 25.2 percent as of the end of June 2015 from 24.2 percent a year ago.

TDI launched its latest product offering in mid-July, Tanduay Select, a 60 proof rum, which is currently available in the Visayas-Mindanao area, and would soon be sold in Metro Manila and the rest of Luzon.

Property unit Eton Properties Philippines, meanwhile, saw its income more than double to P114 million from only P38 million a year earlier.Income from rent accounted for a significant portion of earnings.

More buildings catering to the business process outsourcing industry are expected to constructed over the near term.