LT Group earnings rise 15%

LT Group Inc., the conglomerate of taipan Lucio Tan grew its net income by 15 percent to P10.83 billion, driven mainly by the growth in the banking and tobacco businesses.

Among the different business segments, Philippine National Bank (PNB) contributed P4.83 billion or 45 percent of the total attributable income, followed by tobacco with P4.39 billion or 40 percent of the total.

Tanduay Distillers Inc. poured in P631 million or six percent, while Asia Brewery Inc. (ABI) accounted for P551 million or five percent. Eton Properties Philippines provided P348 million or three percent.

The conglomerate’s 30.9 percent stake in Victorias Milling Co. (VMC), meanwhile, contributed P174 million or two percent.

PNB posted a net income of P8.56 billion last year, 16 percent higher than 2016’s P7.38 billion. This was on the back of higher net interest income, net service fee income and higher gain from the sale of Real and Other Properties Acquired (ROPA).

For the tobacco business, income was P4.4 billion in 2017 from P2.59 billion, while equity in net earnings from the 49.6 percent stake in PMFTC Inc. (PMFTC) reached P4.37 billion.

Better pricing and improved product mix contributed to growth as PMFTC raised the price of Marlboro for the first time since 2013.

The industry’s total volume was estimated to have decreased by six percent to 74.9 billion sticks, largely due to excise tax driven price increases, tempered by trade loading toward the end of 2017, in anticipation of more price increases as the excise tax was further increased starting 2018.

TDI on the other hand, posted a net income of P631 million last year, down 31 percent despite higher liquor revenues, which grew 20 percent to P15.19 billion.

Based on Nielsen estimates, TDI’s market share in the Visayas was 61 percent and in Mindanao 65 percent as of December 2017.

However, revenues from ethanol fell 31 percent to P1.6 billion as volume dropped 21 percent, and selling prices were lower.

ABI’s net income was likewise lower at P552 million primarily due to higher spending on new products.

Revenues, nonetheless, were 17 percent higher at P13.89 billion from P11.85 billion with the higher contribution from bottled water, soymilk and packaging partly offset by the decrease from energy drinks.

Cobra Energy Drink and Vitamilk soymilk continue to be market leaders, while Absolute and Summit bottled water have the second largest market share.

Eton Properties Philippines Inc. (Eton) property business, also posted lower net income at P348 million. This was down P42 million or 11 percent lower than 2016’s P390 million.

Revenues were likewise lower by 21 percent at P2.23 billion due to lower sales.

Leasing revenues grew nine percent to P1.39 billion with the opening of 2,100 square meters (sqm) of additional retail space in Eton Tower Makati and higher lease rates. Eton’s BPO office buildings had a take-up rate of 99 percent as of end-2017.