Slack in liquor businesses tempered LT Group’s profit performance in first half

Tycoon Lucio Tan-led conglomerate LT Group Inc. (LTG) chalked up P4.53 billion in first semester net profit, flat from last year’s level as its lackluster liquor businesses offset higher earnings from the tobacco and real estate units.

LTG’s tobacco business contributed 41 percent or P1.85 billion total attributable income, followed by banking arm Philippine National Bank (PNB) with P1.52 billion or 34 percent. Asia Brewery Inc. added P401 million or 9 percent, while Tanduay Distillers Inc. accounted for P339 million or 7 percent.

Real estate arm Eton Properties Philippines Inc. contributed P174 million or 4 percent while equity in net earnings from the group’s 30.9-percent stake in Victorias Milling Company Inc. (VMC) reached P246 million or 5 percent of total.

Net income from the tobacco business grew by 28 percent year-on-year in the first semester mainly due to higher selling prices. Philip Morris Fortune Tobacco Corp. raised the price of Marlboro for the first time since January 2013, with the recommended retail price per stick now at P3.50 from P3.

Philippine National Bank’s six-month net profit declined by 38 percent year-on-year to P2.75 billion, having come from a higher base last year when earnings were boosted by a P1.48-billion gain from the sale of idle real estate assets.

Meanwhile, Tanduay Distillers saw a 24-percent drop in six-month net profit to P339 million. Liquor sales volume increased by 22 percent. However, the volume of ethanol was 30 percent lower, while margins contracted due to lower selling prices and higher alcohol costs.

For beer distillery arm Asia Brewery, net income fell by 44 percent year-on-year to P401 million. The company’s operating expenses increased as it had to spend more on advertising to keep up with the competitive environment.

Eton Properties reported a net income of P174 million in the first six months, 31 percent higher. —DORIS DUMLAO-ABADILLA