LT Group earnings surge 49% in 2018

MANILA, Philippines — LT Group Inc. (LTG) grew its net income by 49 percent to P16.19 billion last year compared to the P10.83 billion reported in 2017.

LTG is the listed holding company of taipan Lucio Tan. It has businesses in banking, tobacco,  property, beverage and liquor.

In a disclosure yesterday, the conglomerate said banking arm Philippine National Bank contributed P5.47 billion or 33 percent of total income, while the tobacco business accounted for P8.72 billion or 54 percent.

Tanduay Distillers Inc. (TDI) added P890 million or five percent.

Eton Properties Philippines Inc. (Eton) likewise  contributed P479 million, while Asia Brewery Inc. (ABI) provided P421 million,  each accounting for three percent of the  total.

PNB’s net income reached P9.78 billion, 14 percent higher. Loans and receivables grew 16 percent to P581 billion, while net interest margin improved to 3.2 percent.

The tobacco business continued to perform well even as the volume of the industry has been declining.

Fortune Tobacco Corp., which is the holding company for LTG’s stake in PMFTC, reported a net income of P8.75 billion.

Last year, LTG’s income from the tobacco business was P4.40 billion, while equity in net earnings from the 49.6 percent stake in PMFTC reached P4.37 billion.     

Volume is on the decline since the substantial increase in excise taxes was implemented under Republic Act  10351 starting 2013 and the current RA10963 starting 2018.  

From a low of P2.72 per pack of 20 sticks in 2012 for the lower tier and P12 per pack for the upper tier, the excise tax is currently at P35 per pack, or about three to 13 times in seven years.  This resulted in higher selling prices, which adversely affected volume. 

TDI’s net icome, meanwhile, amounted to P909 million, up 44 percent.

Tanduay was ranked as the world’s number one rum in 2018 and its nationwide market share for distilled spirits was at 27.3 percent as of the end of December last year.

Eton Properties ended the year with a net income of P479 million, reflecting a 38 percent growth year on year.  It completed the construction of Eton Square Ortigas, a stand-alone pocket retail development, adding 2,000 square meters of gross leasable area to its commercial leasing portfolio.

On the other hand, ABI’s earnings amounted to P421 million, 24 percent lower than the previous year.