LT Group nets P4.56B

TYCOON Lucio Tan-led LT Group Inc. registered a 28-percent year-on-year increase in net profit in the first six months to P4.56 billion on higher earnings across its banking, tobacco, liquor and property businesses.

Banking arm Philippine National Bank posted a 20-percent year-on-year growth in profit to P4.3 billion in the first semester due to a double-digit expansion in interest earnings and trading gains.  PNB contributed P1.73 billion or about 38 percent of LTG’s attributable income for the semester.

The bank’s net interest income grew 13 percent to P9.53 billion in the first six months while other income jumped by 70 percent to P5.46 billion, buoyed by an increase in securities trading and foreign exchange gains, the unloading of idle assets and the sale of a 51 percent stake in the life insurance business to Allianz.

The tobacco business accounted for P1.45 billion or 32 percent of LTG’s bottom line, followed by beer brewer Asia Brewery Inc. (ABI) at P720 million or 16 percent.

Hard liquor arm Tanduay Distillers Inc. added P444 million to group-wide profit or 10 percent of total while real estate arm Eton Properties contributed P132 million or 3 percent.

Equity in net earnings from Victorias Milling Co. Inc. (VMC) amounted to P96 million or 2 percent of total.

Equity in net earnings from LTG’s 49.6 percent stake in Philip Morris Fortune Tobacco Corp. surged by 333 percent due to the change in mix of sales, with premium Marlboro accounting for a higher share of total volume. But while the company sees some improvement, LTG said illicit trade continued to affect overall profitability of the tobacco business.

ABI’s profit contribution increased by 38 percent year-on-year as Cobra energy drink, Absolute and Summit bottled water, Tanduay Ice alcopop and Vitamilk soymilk retained market leadership in their respective segments. “The exceptionally hot summer and some impact from election-related spending resulted in the growth in volumes of ABI’s products,” the LTG said.

In late May, the LTG signed a joint venture agreement with Heineken for the beer business.

Tanduay reported a 148 percent growth in net profit contribution as revenues were boosted by its upstart bioethanol business. Volume for liquor was relatively flat in the first semester.

Citing Nielsen estimates on customer offtake, Tanduay’s nationwide market share has remained steady in the past two quarters at 24 percent. It continues to enjoy the dominant market share in the Visayas and Mindanao areas, at 61 percent and 60 percent, respectively, as of June 2016.