LT Group Inc., the holding company of tycoon Lucio Tan, on Monday said its income grew by 50 percent to P16.19 billion from last year’s P10.83 billion, boosted by its tobacco business and banking unit.
Philippine National Bank contributed P5.47 billion or 33 percent of total, the tobacco business under PMFTC Inc. accounted for P8.72 billion or 54 percent, Tanduay Distillers Inc. added P890 million or 5 percent.
Property developer Eton Properties Philippines Inc. contributed P479 million, while Asia Brewery Inc. provided P421 million, each accounting for 3 percent of total.
LTG’s 30.9-percent stake in Victorias Milling Co. Inc. added P247 million, or 2 percent of the total.
PNB’s net income under the pooling method was P9.78 billion for 2018, 14 percent higher than the previous year’s P8.56 billion, boosted by the sale of real and other properties acquired at P3.85 billion net of taxes, compared to the P2.71 billion booked in 2017. In its tobacco business, the company said the volume of the industry has been declining since the substantial increase in excise taxes was implemented under Republic Act 10351 starting 2013 and the current RA 10963 starting 2018.
From a low of P2.72 per pack of 20 sticks in 2012 for the lower tier and P12 per pack for the upper tier, the excise tax is currently at P35 per pack, or about three times to 13 times in seven years. This resulted in higher selling prices, which has adversely affected volume.
“With the government keeping the illicit trade in check, PMFTC has been able to operate at a level- playing field and has enabled the company to pass on taxes and no longer price our products at economically unsustainable levels. PMFTC’s profitability has thus returned to the 2012 level prior to the substantial increase in excise taxes and the massive proliferation of the illicit trade,” it said.
PMFTC is the combined company of Tan’s Fortune Tobacco Corp. and Philip Morris Philippines.
Tanduay’s net income last year grew 44 percent to P909 million from the previous year’s P631 million, while Eton ended the year with a net income of P479 million, 38 percent higher than the P348 million recorded in 2017.
Revenues of Eton were 43 percent higher to P3.2 billion from P2.23 billion as both leasing revenues and sales of residential units increased.
Meanwhile, Asia Brewery’s earnings last year fell 24 percent to P421 million from the previous year’s P552 million, despite its revenues rising by 9 percent due to higher revenues from packaging, energy drinks, bottled water and soy milk.