EDI ’13 net profit rose 17.4%

Stays as world’s largest-selling brandy brand

TYCOON Andrew Tan- led Emperador Distillers Inc. grew its net profit last year by 17.4 percent to P5.8 billion as revenues increased at a double- digit pace despite higher excise taxes on liquor.

In a statement, Emperador said its 2013 revenues grew by 25.6 percent to P29.6 billion, supported by a 7-percent rise in volume.

“With a sales volume of 33 million cases, Emperador maintains its position as the world’s largest selling brandy brand in 2013, aside from being the largest liquor company in the Philippines,” the company said.

Emperador sold 31 million cases of liquor in 2012 and 20.1 million cases in 2011. The volume growth of 7 percent, which eased from the 54.2 percent expansion in 2012, was attributed by the company to the excise tax reform that took effect last year.

In a research note issued in November last year when it initiated coverage on Emperador, online stockbrokerage COL Financial said the major threat facing domestic alcohol was the 15-20 percent average increase in the selling price of local spirits as a result of higher excise tax. But COL noted that its volume, revenue and profit performance suggested that EDI was responding well to the taxation issue.

“We believe that this is the result of the favorable timing of its launch of Emperador Deluxe, which also took advantage of the reduction in excise taxes and which earns higher revenues and margins for the company,” the brokerage said.

COL said the higher-margin Emperador Deluxe brand had the potential to be the next growth driver of Emperador as it targets the growing middle class.

Emperador is expanding both its production facilities in Spain and in the Philippines with an investment of P5.8 billion in state-of-theart vineyards, distilleries and bodegas in Spain. This year, Emperador will spend P4 billion in the Philippines for additional production capacity.

With zero debt in its balance sheet, the company ended 2013 with a cash balance of P24 billion, including P12.5 billion from share sales in the third quarter of last year.