LT Group profit declines by 63% to P4B

LUCIO C. Tan’s LT Group, Inc.’s (LTG) net income attributable in the first six months went down by 63% to P3.73 billion from last year’s P10.03 billion.

“This is mainly due to the higher provisioning for credit losses booked by its banking subsidiary and the elimination of the gain from the transfer of real estate assets at the consolidated level,” the company said in a statement on Wednesday.

The company said its net expenses and other income at the parent level stood at P185 million.

During the period, it said Philippine National Bank (PNB) had a negative net contribution of P6.46 billion after eliminating the gain of P33.6 billion at the consolidated LTG level.

Listed PNB’s net income for the period amounted to P22.2 billion under the pooling method, which already includes a P33.6-billion gain from the transfer of properties into PNB Holdings Corp. The bank’s net interest income declined by three percent to P16.85 billion.

The company’s tobacco business is said to have contributed P8.97 billion of total attributable income. It generated a P9.01-billion net income in the first semester, a 10% increase from P8.21 billion in the same period last year.

The tobacco industry’s volume estimate for the period stood at 26.8 billion, nine percent less than last year’s 29.5 billion sticks.

“This is due to the October to November 2020 price increases to pass on the additional excise taxes,” LTG explained.

The company said it is not against tax increases, however, it maintains that these increases should be “moderate” as this might lead to further volume declines.

Meanwhile, Tanduay Distillers, Inc. (TDI) added P602 million to LTG’s total attributable income. The unit saw an 11% growth in net income for the six-month period to P605 million from last year’s P543 million due to a 13% increase in liquor sales volume and 55% growth in bioethanol sales.

TDI’s nationwide market share inched up to 26.9% as of end-June this year from 24.1% year on year. Its market shares in the Visayas and Mindanao region also grew, with its market share in Visayas rising to 68.2% from 62.4% and in Mindanao growing to 79.5% from 72%.

Some P343 million were contributed by Asia Brewery, Inc. (ABI) to LTG’s total attributable income. Its net income for the first half amounted to P343 million, surging by nearly eight times from P40 million.

“The higher income is largely due to the absence of any losses from the AB Heineken joint venture as the partnership transitions starting 2021 to the engagement of ABI to brew and distribute Heineken(R) and Tiger(R) beers in the Philippines,” LTG explained.

ABI revenues for the period “were relatively flat” as the higher volume from Cobra Energy Drink, which now has 65% market share, offset the lower volume of bottled water and soymilk.

Property arm Eton Properties Philippines, Inc. made up for P287 million of LTG’s total attributable income. The unit’s income for the six-month period amounted to P288 million, declining by 29% from last year’s P404 million as both residential unit sales and leasing income went down.

Eton Properties has a leasing portfolio of around 181,000 square meters (sq.m.) of office space and over 45,000 sq.m. of retail space.

It has several projects in the pipeline, which include the 36-storey office and residential development Blakes Tower in Makati City, with 11,400 sq.m. of office space and 14,000 sq.m. of residential space. It is also working on retail and commercial center Eton City Square 1 in Laguna, which will add 7,200 sq.m. of gross leasable area to its commercial leasing portfolio in phase 1.

LTG’s 30.9% stake in Victorias Milling Co., Inc. added P169 million to the company’s total attributable income.

Shares of LTG at the stock exchange declined by 1.61% or 16 centavos on Wednesday, closing at P9.80 apiece. — Keren Concepcion G. Valmonte

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