Taipan Lucio Tan’s holding company, LT Group Inc., saw profits in the first quarter grow 1 percent to P6.53 billion as its core tobacco business slowed due to higher taxes.
LT Group’s cigarette earnings come from PMFTC Inc., whose brands include Marlboro and Fortune. The segment’s profits fell 16 percent to P4.22 billion despite a jump in volume.
The listed holding company said it did not pass on higher taxes to buyers last year and in the first quarter of the year.
“There was no price increase implemented in 2021 and most of the first quarter of 2022, with the previous one in October 2020, so the lower profit can be attributed to the P5 increase in excise taxes that PMFTC had to absorb starting January 1, 2022,” LT Group said.
The tobacco business still accounted for 64 percent of LT Group’s profits during the quarter.
Philippine National Bank, which contributed 25 percent of LT Group’s income, reported a 57 percent profit jump to P2.86 billion. It also reported a 3 percent increase in net interest income to P8.53 billion.
Tanduay Distillers Inc. contributed 5 percent, Eton Properties Philippines Inc. contributed 2 percent and Asia Brewery Inc. contributed 1 percent.
LT Group’s 30.9 percent stake in Victorias Milling Company Inc. contributed another 2 percent.
During the period, Tanduay’s net profit jumped 42 percent to P333 million on higher sales volume. Thus, its nationwide market share for distilled spirits rose to 30.2 percent from 26.5 percent last year.
Profits at Eton dropped 15 percent to P128 million while Asia Brewery also recorded a 62 percent drop in net income to P80 million during the first three months of the year.
“Despite the higher volumes for its products, higher raw material, fuel and other costs resulted in lower profits,” LT Group said. INQ