LT Group 2016 profit jumps 42% to P9.39B

Tycoon Lucio Tan-led conglomerate LT Group Inc. grew its net profit last year by 42 percent to P9.39 billion on higher earnings across its banking, tobacco, liquor and real estate businesses.

Banking arm Philippine National Bank (PNB) accounted for 36 percent of LTG’s attributable income while the tobacco business contributed 27 percent, followed by Asia Brewery Inc. with 19 percent. Tanduay Distillers Inc. contributed 10 percent while Eton Properties accounted for 4 percent.

Equity in net earnings from Victorias Milling Company accounted for 2 percent of total.

PNB reported an increase in net profit last year by 17 percent to P7.15 billion as the steady improvement in its core income was supplemented by nonrecurring revenues. Net interest income grew by 11 percent last year to P19.6 billion, accounting for nearly two-thirds of total operating income. Net interest margin was maintained at 3.2 percent as the decline in asset yields was compensated by the 12 percent growth in low-cost deposits combined with the redemption of its P6.5 billion tier 2 debt notes in June 2016.

A double-digit growth in its noninterest income also boosted PNB’s profit in 2016. Trading and foreign exchange gains surged by 61 percent as the bank benefited from growth in transaction volumes and favorable market conditions. Significant increase in net gains from sale of foreclosed assets was likewise reported, highlighting the bank’s continued efforts to reduce nonearning assets.

Income from the tobacco business amounted to P2.59 billion last year, surging by 149 percent from the previous year due to the change in the mix of products, with premium Marlboro accounting for a higher share of total volume.

For beer-maker Asia Brewery, 2016 earnings increased by 60 percent to P1.76 billion last year, inclusive of a P594 million extraordinary income arising from the revaluation of the beer assets. A joint venture with Heineken for the beer business was formalized in November, resulting in the transfer of the beer and alcopop businesses to joint venture company AB Heineken Inc.

Tanduay Distillers’ earnings for full year 2016 rose to P908 million, more than double the P422 million generated in the previous year as the bio-ethanol business started contributing sales in 2016.

There was a 2-percent increase in the volume of liquor sales. However, Tanduay’s nationwide market share based on Nielsen’s customer off-take on volume slightly declined to 23 percent from 24 percent as of end-2015. It remained a dominant player in the Visayas and Mindanao areas, where its market share rose to 60 percent from 58 percent in 2015.

Property arm Eton posted a 25-percent increase in its net income to P390 million. Total revenue rose by 14 percent to P2.83 billion. —DORIS DUMLAO-ABADILLA