Lucio Tan. FILE PHOTO
Tycoon Lucio Tan-led conglomerate LT Group Inc. (LTG) grew its net profit last year by 15 percent to P10.83 billion on higher earnings from its banking and tobacco businesses.
Philippine National Bank (PNB) contributed P4.83 billion or 45 percent of total attributable income, followed by the tobacco business at P4.39 billion or 40 percent of total.
PNB’s net income rose by 16 percent to P8.56 billion.
Income from the tobacco business was P4.4 billion in 2017 while equity in net earnings from the 49.6 percent stake in PMFTC Inc. reached P4.37 billion. The higher earnings were mainly attributed to better pricing and improved mix. In November 2016, PMFTC raised the price of Marlboro, the first price hike implemented since 2013.
The total volume of the tobacco industry was estimated to have decreased by 6 percent to 74.9 billion sticks, largely due to excise tax driven price increases, tempered by some front-loading towards the end of 2017, in anticipation of more price increases as the excise tax was further increased starting 2018.
Rum-maker Tanduay Distillers Inc.’s net income last year fell by 31 percent to P631 million. While liquor revenues rose by 20 percent to P15.19 billion, revenues from ethanol dropped by 31 percent to P1.6 billion as volume dropped 21 percent and selling prices also declined.
Beer-maker Asia Brewery’s net income for the year slid by 69 percent to P552 million, primarily attributed to higher spending for new products. Moreover, the comparative income in 2016 included a P594- million extraordinary gain from the revaluation of beer assets. Operating expenses increased as Asia Brewery spent more on advertising and selling expenses due to the competitive environment in the carbonated beverage segment, as well as to promote the recently launched Vitamilk in returnable glass bottles. The company also had to book additional depreciation expenses from the new soymilk plant.
For property arm Eton Properties Philippines Inc., net income last year fell by 11 percent to P348 million.