MANILA, Philippines — LT Group Inc. (LTG), the listed conglomerate of taipan Lucio Tan, reported a 17 percent increase in net income in the nine months to September to P14.72 billion.
The growth was driven by strong contributions from the tobacco and banking businesses.
LTG said the tobacco business accounted for P9.57 billion or 65 percent of the total income. Net income grew 40 percent to P9.61 billion.
The government continued its efforts against illicit trade which includes smuggled and locally produced products.
As for new taxes, LTG said it is not against tax increases, but believes that the hikes should be moderate.
“Continual price increases to pass on higher excise taxes may result to further volume drops. The industry’s volume was estimated at 109 billion sticks in 2012 and declined to an estimated 73 billion sticks in 2018, or a decrease of 33 percent over a six-year period,” LTG said.
President Duterte signed Republic Act 11346 which increases further the excise tax on tobacco starting January 2020. It will increase from the current P35 per pack to P45 in 2020, and rise by another P5 per pack annually from 2021 to 2023, then increase by five percent annually thereafter.
Banking arm Philippine National Bank (PNB) added P3.64 billion or 25 percent of the total. Net income under the pooling method was P6.52 billion for the period, 15 percent lower than last year’s P7.63 billion with the absence of large gains from the sale of real and other properties acquired.
Eton Properties Philippines Inc. (Eton), meanwhile, contributed P626 million or four percent. It posted a net income of P629 million or 100 percent higher than the previous year.
Tanduay Distillers Inc. posted a nine month net income of P518 million, down 28 percent. Revenue from liquor was two percent lower due to the four percent drop in volume which was partially offset by the increase in selling prices by an average of P4 per case.
On the other hand, revenue from bioethanol was 32 percent higher as volume increased by 18 percent.
“As of end-September 2019, TDI’s nationwide market share for distilled spirits was at 29 percent, higher than September 2018’s 28.3 percent. In the Visayas and Mindanao regions where most of TDI’s sales are generated, market share was at 68.8 percent,” the company said.
Asia Brewery Inc. (ABI) provided P254 million or two percent to LTG’s total net income. ABI’s nine month earnings amounted to P254 million, down 13 percent year on year.
However, revenues increased by nine percent due to higher volumes of energy drinks, soymilk and bottled water.
Cobra energy drink and Vitamilk soymilk continue to be market leaders while bottled water brands Absolute and Summit have the second largest market share.
LTG’s 30.9 percent stake in Victorias Milling Co. Inc. accounted for P148 million or one percent.