Lucio Tan holding firm reports 50% jump in 2015 net profit

CONGLOMERATE LT Group Inc. grew its net profit last year by 50 percent to P6.6 billion on higher earnings from its banking, tobacco and hard liquor businesses.

Banking arm Philippine National Bank (PNB) contributed P3.51 billion or 53 percent of total income. Beer unit Asia Brewery Inc. had a share of P1.1 billion or 17 percent while the tobacco business contributed P1.04 billion or 16 percent.

Hard liquor unit Tanduay Distillers Inc. (TDI) accounted for P422 million or 6 percent while property arm Eton Properties added P312 million or 5 percent.

Equity in net earnings from LTG’s 22.59-percent stake in sugar firm Victorias Milling Corp. as of end-2015 provided P214 million or 3 percent of group earnings. With the purchase of additional shares from the First Pacific group last month, LTG’s stake in VMC increased to 30.17 percent.

Asia Brewery’s unaudited income of P1.1 billion was 2-percent lower than the previous year’s amid cutthroat competition.

“Our Cobra energy drink, Absolute and Summit water, Tanduay Ice alcopop and Vitamilk soymilk continue to be market leaders. However, intense competition in the beverage market continues to affect volumes and margins,” LTG said in a statement.

The tobacco business reported a big improvement in earnings, with net income surging to P1.04 billion compared to only P148 million in the previous year.

Equity in net earnings from LTG’s 49.6 percent stake in Philip Morris Fortune Tobacco Corp. reached P975 million, 89 percent higher than the level last year.

“While there has been some improvement, the illicit trade continues to affect the overall profitability of the cigarette business,” LTG said.

Tanduay’s unaudited net income for 2015 reached P422 million, significantly higher than the P101 million reported in the previous year. Revenues were relatively flat, as lower volumes were offset by price increases.

Quoting a report from market research firm Nielsen, Tanduay’s market share improved to 24.1 percent as of end-2015 from 22 percent at end-2014. The market share gain was from the Visayas and Mindanao areas.

Property arm Eton contributed P313 million compared to P120 million in the previous year. Revenues were 9 percent higher with higher lease rates for new or renewed contracts in office buildings. To increase its leasing portfolio, Eton will add a fifth business process outsourcing (BPO) office tower at Eton Centris in Quezon City.

At the parent company level, LTG had a cash hoard of P2.6 billion as of end-2015.