Tanduay gets ‘AAA’ rating from Crisp

MANILA, Philippines—Credit Rating and Investors Services Phils. Inc. (Crisp) on Tuesday reaffirmed its AAA issuer rating on Tanduay Distillers Inc., which indicates the borrower’s “strongest capacity” to repay debt obligations and a “very low probability of default.”

In a statement, the local debt watcher cited Tanduay’s strong financial performance, specifically its third-quarter interim report this year, which reflected a 15-percent increase in net operating income, compared with last year’s 13-percent hike.

“Over the years, Tanduay’s gross profit remained stable, save for a medium dive in 2008 due to high input and energy costs,” said Crisp president Noel Leyco.

“Robust sales volume and price increases, however, combined to mitigate the increases in alcohol prices and the cost of brand-new bottles,” he added. “During the first nine months of the year, gross profit growth stood at 25 percent, higher compared to last year’s 23 percent.”

Crisp also noted that, over the last decade, Tanduay’s revenue grew by some 7.7 percent yearly, accelerating to a growth of 11 percent in the last five years.

As of 2010, the company’s sales of P11.5 billion has doubled versus its revenue in 2001.

At the same time, the debt watcher pointed to Tanduay’s 157-year-old brand, which “commands global name recognition.”

Leyco said Tanduay commanded a 99.3-percent share of domestic rum sales and holds the record as the second-largest selling rum in the world, after Bacardi of Puerto Rico. The former is sold internationally while Tanduay is currently sold and promoted only in the Philippines.

“Locally, Tanduay controls 34 percent of the total market for distilled spirits with a 9-percent annual growth rate,” he said. “Tanduay holds a dominant position in the Visayas and Mindanao, with a 76-percent market share that grows yearly at an average of 12 percent.”