LT Group Inc., the holding firm of most businesses of tycoon Lucio Tan, on Tuesday said its income in the first half rose 9 percent to P10.03 billion, from last year’s P9.24 billion, which came mostly from its tobacco unit.
The company said its tobacco business already accounted for 82 percent of its entire income or P8.18 billion, while Philippine National Bank contributed 8 percent or P795 million. Liquor arm Tanduay Distillers Inc. chipped in P541 million or 5 percent, Eton Properties Philippines Inc. added P402 million or 4 percent, and Asia Brewery Inc. accounted for P40 million or less than 1 percent.
The company’s 30.9-percent stake in Victorias Milling Co. Inc. contributed P148 million, or 1 percent, to its income.
The tobacco business operated by PMFTC Inc., where the company has a 49.6-percent stake, had a net income of P8.22 billion for the first six months of the year, 40 percent higher than last year’s P5.87 billion.
The higher income is attributed to the increase in the share of premium Marlboro as well as the price increases implemented in late August 2019. The industry’s volume is estimated to have declined by 17 percent the first half due to the impact of the enhanced community quarantine (ECQ) implemented in Luzon starting March 17 and in other select cities thereafter.
President Duterte signed Republic Act 11346 in July 2019 which increased further the excise tax on tobacco starting January. From P35 per pack in 2019, it went up to P45 per pack in 2020, increasing by P5 per pack annually from 2021 to 2023, then rising by 5 percent annually thereafter.
PNB’s net income under the pooling method plunged 64 percent to P1.44 billion from last year’s P4.04 billion. The steep fall in income was mainly due to the P8.44-billion provision for credit losses that the bank booked for the first half, which was significantly higher compared to P810 million last year, due to the ongoing pandemic that has resulted in an economic downturn.
Tanduay’s net income for the period rose 43 percent to P543 million, from last year’s P380 million. The higher income is due to improved margin in the liquor segment and a 41-percent decline in selling and marketing expenses to P467 million, from P786 million last year.
Revenues from liquor were 10 percent higher with the average P160 per case price increase implemented in January to pass on the higher excise taxes, which partially offset the drop in volume. Revenues from bioethanol were also lower.
As of end-June, Tanduay’s nationwide market share for distilled spirits was at 24.1 percent, down from last year’s 29.8 percent.
In the Visayas and Mindanao regions where most of its sales were generated, market share was at 62.4 percent and 72 percent, respectively, as of end-June. Last year, its share for the Visayas was at 64.3 percent and Mindanao at 72.4 percent.
Meanwhile, Eton Properties’ net income for the period rose 9 percent to P404 million, from last year’s P371 million, mainly due to the increase in rental income. At the end of June, Eton Properties had a leasing portfolio of approximately 181,000 square meters of office space and over 43,000 square meters of retail space.
Asia Brewery’s income for the period plunged 84 percent to P40 million, primarily due to lower volumes across its products as the ECQ affected sales in sari-sari and convenience stores as well as in supermarkets. Revenues, meanwhile, were 17 percent lower, the company said.