LT Group Inc. the holding firm of most of tycoon Lucio Tan’s businesses, said its net income grew 61 percent to P3.63 billion during the first quarter of the year, mainly on the good performance of its tobacco business after the company increased its prices.
The company said its net income last year reached P2.25 billion.
The tobacco business, through PMFTC Inc. contributed P2.35 billion or 65 percent of total attributable income.
Philippine National Bank accounted for P833 million or 23 percent, followed by Asia Brewery Inc. at P149 million or 4 percent.
Liquor maker Tanduay Distillers Inc. generated P135 million or 4 percent, while Eton Properties Philippines Inc. provided P97 million or 3 percent. Its 30.9-percent stake in Victorias Milling Co. Inc. contributed P59 million or 2 percent.
Income from the tobacco business was P2.36 billion for the period, the company said, while equity in net earnings from the 49.6-percent stake in PMFTC Inc. reached P2.29 billion.
“The higher earnings were mainly attributed to better pricing as the company is now operating in a level-playing field and can pass on the increases in excise taxes and no longer price its products at economically unsustainable levels. The company hopes the government continues on its actions versus the illicit trade, which include smuggled and locally produced products,” company President Michael G. Tan said.
“But there may a further drop in volumes due to higher prices,” Tan added.
The industry’s total volume was estimated to have decreased by 8 percent to 15.3 billion sticks for the period largely due to excise tax-driven price increases.
PNB’s net interest income was 25 percent higher for the period at P6.43 billion as loans and receivables increased by 17 percent to P504 billion, and net-interest margin improved to 3.3 percent from 3 percent last year.
Asia Brewery’s net earnings for the period amounted to P149 million, 1 percent lower than last year’s figure, as margins declined as a result of product mix, as well as higher costs attributed to the depreciation of the peso.
Revenues were 8 percent higher year-on-year to P3.4 billion, from P3.14 billion with the increase in revenues from energy drinks, bottled water, soymilk and packaging.
Cobra Energy Drink and Vitamilk soymilk continued to be market leaders, while Absolute and Summit bottled water have the second-largest market share.
The company also raised the prices of Cobra by P2 per 240ml returnable glass bottle to pass on the tax on sugary drinks.
Meanwhile, Tanduay’s income of P135 million for the period was 35 percent lower than the previous year’s P207 million as higher selling and advertising expenses pulled down earnings.
Revenues from liquor were 2 percent higher to P3.7 billion as selling prices were raised to pass on the increase in excise taxes.
Eton’s net income of P97 million for the period was 29 percent more than last year’s P75 million.
Revenues were 8 percent higher to P579 million as both leasing revenues and sales from residential units increased.
Higher lease rates, as well as additional retail space from the 5,200 square meter expansion of Centris Walk within its complex in Quezon City contributed to the growth of leasing revenues.