LTG earnings up 9% in 7 months

MANILA, Philippines — LT Group Inc., the listed holding company of taipan Lucio Tan, grew its first half net income by nine percent to P10.03 billion.

The conglomerate has interests in tobacco through PMFTC, banking through Philippine National Bank, liquor through Tanduay Distillers,  property through Eton Properties Philippines and beverage through Asia Brewery Inc.

The tobacco business continued to be the biggest contributor, accounting for P8.18 billion or 82 percent of total attributable income. PNB contributed P795 million or eight percent.

Contributing five percent was Tanduay with P541 million, while Eton Properties added P402 million or four percent. Asia Brewery accounted for P40 million or less than one percent.

LTG’s 30.9 percent stake in Victorias Milling Co. Inc.  translated to P148 million or one percent in net income contribution.

In terms of the different business segments, the tobacco saw lower volumes in the industry in general.

Estimates showed that the tobacco industry’s volume declined 17 percent in the first half due to the impact of the enhanced community quarantine implemented in Luzon starting March 17 and in other select cities thereafter.

Despite the lower volume, the tobacco business recorded a net income of P8.22 billion during the period, up P2.34 billion or 40 percent.

Equity in net earnings from LTG’s 49.6 percent stake in PMFTC reached P8.25 billion, up 46 percent mainly due to the higher share of premium Marlboro, as well as the price increases implemented in late August 2019.

PNB’s net income was 64 percent lower at P1.44 billion  primarily due to the P8.44 billion provision for credit losses the bank booked in the first half.

On the other hand, Tanduay’s net income was up 43 percent due to improved margin in the liquor segment and a 41 percent decrease in selling and marketing expenses.

Eton’s net income likewise increased nine percent to P404 million, mainly due to higher rental income.  The company has a leasing portfolio of approximately 181,000 square meters of office space and over 43,000 sqmof retail space.

It will continue to add projects in the pipeline, including the 36-story Blakes Tower in Makati City which will have 10,500 square meters of office space and 14,000 square meters of residential space.

Asia Brewery, meanwhile, posted a net income of P40 million, down 40 percent year-on-year, primarily due to lower volumes across ABI’s products.

This was a result of the quarantine which affected sales in sari-sari and convenience stores and in supermarkets.

Nevertheless, Cobra energy drink and Vitamilk soymilk continue to be market leaders, while bottled water brands Absolute and Summit have the second highest market share.