Higher tobacco revenues pull up LTG Q1 profit by 4.5% to P6.49B
Tycoon Lucio Tan-led conglomerate LT Group Inc. (LTG) grew its first quarter net profit by 4.5 percent year-on-year to P6.49 billion, driven by higher earnings contributed by its banking, tobacco and liquor businesses.
The tobacco business accounted for a hefty 77 percent of total earnings. This business posted a net income of P5.03 billion in the three-month period, P24 million better than the year-ago level despite the slowdown in industry-wide sales volume arising from price increases as additional excise taxes were passed on to consumers.
Banking arm Philippine National Bank (PNB) contributed P1.02 billion, or 16 percent, of LTG’s total attributable net income in the first three months.
The bank’s net income under the pooling method was P1.83 billion in the first quarter, 33 percent higher year-on-year on the back of higher noninterest earning alongside lower loan loss provisioning expense. Amid an improved economic outlook, provisions for credit losses eased to P2.1 billion in the first quarter compared to P3.36 billion in the same period last year.
Alcohol sales
PNB’s net interest income fell by 7 percent year-on-year to P8.24 billion, while trading and foreign exchange gains and miscellaneous income likewise tumbled by 38 percent to P1.55 billion. However, service fees and commission income advanced by 35 percent year-on-year to P1.29 billion.
Tanduay Distillers Inc. (TDI) contributed P233 million, or 4 percent, of LTG’s income for the first quarter. This unit’s stand-alone net income for the first three months was P235 million, 18 percent better year-on-year, buoyed by the 5-percent increase in the volume of liquor sales and higher rectified alcohol sales.
As of end-March 2021, TDI’s nationwide market share for distilled spirits was at 26.5 percent, compared to the year-ago level of 27.7 percent. In the Visayas and Mindanao regions where most of Tanduay’s sales are generated, market share stood at 70.1 percent and 76 percent, respectively, higher than the previous year’s 67 percent and 75 percent.
Beer-maker Asia Brewery Inc. (ABI) contributed P211 million, or 3 percent, of LTG’s earnings. Its first quarter net profit surged by 185 percent year-on-year in the absence of losses from the AB Heineken joint venture as their relationship transitions from equity partnership to toll manufacturing and distribution starting 2021. ABI was tapped to brew and distribute Heineken and Tiger beers in the Philippines.
On the other hand, the property business under Eton Properties Philippines Inc. (Eton) fell by 11 percent year-on-year to P150 million due to the decline in residential unit sales alongside lower leasing income.
