LT Group Inc., the listed conglomerate of businessman Lucio Tan, posted an 80-percent surge in net income in the first six months of the year due to improvement in its banking, distilled spirits, and property segments.
The company’s six-month net income reached P5.33 billion, significantly higher than the P2.9 billion recorded last year, while its operating revenues likewise grew by 4.7 percent to P26.4 billion from P25.2 billion the same time last year.
Revenue-mix during the six months of the year consisted of a 60-percent share from the banking segment, 15 percent in beverages, 12 percent in tobacco, 5 percent in distilled spirits and 3 percent in its property business.
The firm’s banking arm Philippine National Bank (PNB) saw net income grow by 12 percent to P3.6 billion in the first semester of the year from P3.2 billion the same time last year, due to the steady growth of its net interest and non-interest incomes.
Beverages unit Asia Brewery Inc.’s (ABI) net income declined by 16.7 percent to P523.8 million from P629.5 million, as its revenues decreased slightly by 1.2 percent to P7.1 billion from P7.2 billion a year ago.
“This was primarily due to the decline in sales of Cobra, beer and alcopop, offset by higher revenues posted by Absolute and Summit water, Vitamilk soymilk and commercial glass bottles,” the company said in its quarterly report.
For distilled spirits, Tanduay Distiller Inc. reported a turn-around to P179.5 million net income from the net loss of P172.5 million the same period in 2014 due to the increase in selling prices which offset a slight volume decline in the first half of 2015.
Property vehicle Eton Properties Philippines Inc. grew its net income three-fold in the first six months of the year to P113.9 billion from P38 billion a year ago led by higher residential and leasing revenues.
Tobacco manufacturer Philip Morris-Fortune Tobacco Corp. booked P424.9 million net income in the first half, which is 40.4 percent lower than P713.3 million the same time last year as it continues to be affected by higher excise taxes and illicit trade in the cigar industry.
LT Group is programming P8 billion to P9 billion capital spending this year — P7.7 billion of which will go to capex in its property business to ramp up office leasing projects, while the rest will cover the other segments beverage, liquor, and tobacco. The 2015 budget is slightly higher than the actual P7.4 billion spent in 2014.
The company plans to make PNB one of the country’s “top three banks” in the next few years, while ABI will expand its water capacity. PFMTC is confident it can get back its market share and eventually grow profits on the effectivity of the tax stamps, which are intended to prevent anomalies and push tobacco players to pay correct excise taxes. The distilled spirits business is focused on market strategies to boost profits and sales, while the property segment will be boosting its portfolio of office projects in a bid to relist at the stock exchange as soon as 2017.
Incorporated in 1937, The Lucio Tan-led conglomerate has diversified business interests in distilled spirits (Tanduay), beverage (ABI), tobacco (Philip Morris-Fortune Tobacco Corp.), banking (PNB), and property development (Eton).