Tanduay Holdings profit rises 60% to P855M in 9 months

In a disclosure to the stock exchange on Friday, Tanduay said net earnings reached P855 million from January to September this year, nearly on track to meet its P1-billion target for the whole year.

The company earlier said it was eyeing revenues of P14 billion this year, 20 percent higher than the 2010 level, on the back of a 15 percent rise in volume sales to 20.39 million cases.

Meanwhile, Tanduay chief finance officer Nestor C. Mendones said the company is hoping to undertake a secondary offering of shares in the first week of December to raise about P1.8 billion. The move is intended to comply with the bourse’s minimum public float requirement of 10 percent.

After the offer, Tanduay will increase its public float to 10.7 percent from the current 2.9 percent.

Mendones said the board approved a capital-raising exercise via a two-tranche placing and subscription transaction involving the sale by majority shareholder Tangent Holdings Inc. of 398.1 million shares to the public at a still undetermined price.

The board likewise accepted the offer of Tangent to subscribe to the same number of new common shares from Tanduay’s unissued capital stock at the adjusted offer price, subject to the approval of stockholders.

“The capital raising exercise is intended to fund the company’s expansion of capacity, increase in operational efficiency and rationalization of operations and at the same time, offer the investing public the opportunity to participate in the company’s growth,” Tanduay said.

The company has tapped PNB Capital & Investment Corp. as financial advisor and issue manager.

Tanduay is beefing up the capacity of its nine-hectare distilling plant in Batangas to 150,000 liters from the current 100,000 liters per day.

It is also repairing its plant in Cabuyao, Laguna which had been gutted by fire in October 2008. The facility used to produce 30,000 cases per day.

Tanduay, which reportedly controls over 95 percent of the local rum market in Visayas and Mindanao, plans to double its market share in Luzon to 12 percent over the next three years. It aims to achieve this through the launch of more product offerings.

Among its traditional best sellers include Tanduay Five Years brand, Tanduay ESQ, Rhum G5, Gin Kapitan and Cossack Blue. Newly-launched Boracay Rum, on the other hand, has attracted a good following especially among the younger generation.