La Tondeña posts P1.16-B income in first 9 months

La Tondeña Distillers Inc. (LTDI), the hard liquor subsidiary of food and beverage giant San Miguel Corp., reported a net income of P1.16 billion in the first nine months of the year or a 41-percent increase from last year, driven by stronger sales volumes effective cost containment and lower finance charges.

In a statement, LTDI said strong sales volumes in the Southern Philippines contributed to the firm’s improved performance for the period under review. In particular, the firm’s leading products – GSM Blue and Vino Kulafu boosted in sales by 50 percent.

LTDI said this offset the slowdown sales in the northern Philippines brought about by the lingering effects of a deliberate reduction in dealer inventory.

For the third quarter alone, profits grew 27 percent to P347 million while operating income amounted to P548 million, bringing the year-to-date level to P1.92 billon.

Using cash generated from continuous improvements in working capital, LTDI was able to significantly reduce its interest expenses by as much as 76 percent as of end-September, contributing P582 million to net profit.

LTDI said its initiative to improve selling and distribution costs in line with a sustained drive to reduce fixed costs throughout the organization, yielded the desired results. Year-to-date selling and distribution expenses were cut down by more than half while total fixed costs were trimmed down by eight percent.

As the company directed its efforts in reducing receivables and trade inventory levels to normal levels, LTDI’s working capital improved to P2.8 billion as of end-September from P6.2 billion a year ago.

LTDI said the growth was achieved despite a challenging third quarter marked by the seasonal tightness of molasses supply that led to higher costs.

LTDI chairman Eduardo Cojuangco Jr. expressed confidence that the company will be able to sustain its strong performance for the rest of the year as major steps have already been taken to ensure further growth.

Among the initiatives being implemented to post stronger gains are aggressive brand building, more efficient sales-to-trade monitoring, and increased operational efficiencies.

While recognizing that its best opportunities lie in expanding the domestic market, LTDI is also stepping up efforts to bring its products to regional markets. During the first quarter, its export volume more than doubled following strong consumer demand for Tondeña Manila Rhum in Thailand.

In its board meeting yesterday, the board of San Miguel approved the declaration of a P0.375 cash dividend per share for both common and preferred shares, payable on Dec. 6, 2002, to stockholders of record as of Nov. 15, 2002. – Zinnia dela Peña